Can Anyone Explain the 1 Trillion Dollar Coin
 

I am baffled. The congress is proposing that the mint create a 1 Trillion Dollar Coin which will then be transferred to the Federal Reserve and will eliminate the need to raise the debt limit.

Does this make sense to anybody??

It seems like I hear on a daily basis that "millionaires and billionaires" are not paying their fair share and "cheating" on their taxes, yet when the government spending gets out of control, they can simply stamp out a $10,000 coin and label it 1 Trillion Dollars and their problem is instantly solved.

I would love to hear opinions on this subject.

Tabs is the man for this question.:)

He will arrive shortly.

There is a Pratchett quote for darn near anything..... strongly recommend reading Going Postal for some background on Moist, and then reading Making Money.

money is indeed a social construct.

Here is my take on it:

Looks like the feds have found a new way to raise the debt ceiling without generating inflation, by minting coins instead of printing bills. I guess because the coins are made of platinum they have some intrinsic value. Anyways, this really feels like scraping some spare change from drawers and pockets to pay the monthly bills...

https://www.axios.com/trillion-dollar-platinum-coin-mint-janet-yellen-223e7722-d7ba-47c9-b5f6-49a841d181de.html

Why not just go all in and mint a couple of dozen of these? We can hand them out to our creditors, tell them to simply subtract our current balance and to hold the remainder as credit against any future debts we might incur with them. Oh, and we can tell them not to worry: we have adequate supplies of platinum and can mint more as may be needed.

Financial problems solved.

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Platinum ain’t cheap. Right now, they plan on minting with what they have on hand.

But come to think about it, platinum is used for catalytic converters, and if the cars move to EV, there will be more available…

Palladium is more valuable....



Wanna see a crash? Bc this is how it happens.

Make 28 of them and pay off the debt! It's brilliant!

Sure, just have to print the dollars to buy the platinum :cool:

Platinum shmatinum make em outta cold steel with a platinum coating

i mean the reason why this makes no sense, is that it calls into question the assumed social construct of money as a representation of utility.

except that money doesn't represent utility, or labor, or even value. we agree on some level it does, but it literally doesn't.

No I can not explain, but I thought they already made some out of transparent aluminium, possibly lost those ones, or was it unobtainium?

The coin would be held as collateral for the debt? So why not sell several of these to offset the debt? Jeez what with all of the smoke , mirrors and BS it's no wonder we can't see the truth.

If ya wanna play poker with Tab$ ... ya needs a few coinz :D

Kinda like how manufacturers make wheels that have "chrome cladding" which is a plastic chrome cover "bonded", (glued), to a steel or aluminum wheel. This fakery is going to go south eventually.

Sent from my SM-N950U using Tapatalk

It reminds me of a street magician , which shell is the ball under ? Hey politicians on both sides you ALL have your hands in this mess . Start paying it down and balance the books !!!!!

It's just further watering down the value of a USD

Instead of printing money, I guess it's stamping (in a coin press) money.

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I tell you what. I'll have to start carrying and using more cash so I can watch my change. Someone at a gas station or McD's will give it back in change for a $20.

Trillion dollar coin is just like bitcoin. You gotta believe (and find another believer who'll trade $1.0 trill of goods & services for your coin). Otherwise it's worthless.

This...

I wish I would have thought of just printing money to pay off my debt!

^^^ A case of the classic "Don't try this at home".

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PLA$TIC $$$ .... pay off yer debts with a KC card :D!

Somebody is gonna need a T coin to buy Al Capone's Colt ....

Tabby?

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The potential of the U.S. economy, as compared to the rest of the world is why you can make a trillion dollar coin and get away with it.

I can do a bad job of explaining the trillion dollar coin, but here are the basics.

The idea behind the trillion dollar coin comes from a quirk in our currency laws. Printing paper money is highly regulated and there are limits on how much can be printed or issued. Platinum bullion coins are not covered by the same restrictions. The Treasury Department has the authority to "mint and issue platinum bullion coins" in any denominations the Secretary of the Treasury may choose. So, the theory goes, the Treasury could mint a trillion dollar coin and deposit it with the Federal Reserve's Treasury account instead of issuing new debt.

The $1 trillion liability for the coin would be off budget, while the $1 trillion numinastic profit would be on budget, theoretically giving the government another trillion to spend without raising the debt limit.

This is actually incorrect at all levels. Money serves as a store of value, a measure of value, and a medium of exchange. It is precisely the amount of utility we place in the object we exchange money for. Doing anything else is bartering, and bartering is a hard way to buy and sell.

Studies have shown that all societies eventually develop their own currency - their medium of exchange - money. Famous studies of POWs during WWII showed the evolution from a strictly barter economy to using cigarettes as their currency and using them to trade for goods and services. The Dollar may be a social construct, but the existence of money is integral to the development of society.

Interesting article on the debt ceiling:

https://www.vox.com/policy-and-politics/22684328/us-debt-ceiling-government-shutdown-biden-democrats

Just on the coin:

Mint the coin

If you were following the news during the 2011 and 2013 debt ceiling crises, you’ll remember this one. Way back in 2010, Carlos Mucha, a blog writer and commenter using the name Beowulf, noticed a strange federal law giving the US Treasury secretary the power to issue platinum coins of any value she wishes. The original intention behind the law, as its author, former Rep. Michael Castle (R-DE), told me back in 2013, was to make it easier to produce platinum coins for the international coin collector market. It had nothing to do with the debt ceiling.

But in 2011, Mucha revived the idea in the context of the debt ceiling standoff. The Federal Reserve, he noted, owns trillions in Treasury bonds. The Treasury secretary could issue, say, a platinum coin worth $2 trillion, deposit it into the Treasury’s account at the Fed, and use those funds to sustain the government until the debt ceiling is raised.

The best part of the “Mint the Coin” plan is that the idea of funding the government with a literal $2 trillion coin is extremely funny. The worst part is that it’s extremely funny, and thus seems insufficiently serious for the US government. That’s part of why the Obama administration rejected the idea.

But the legal case for minting the coin is as solid as platinum; just ask former US Mint head Philip Diehl, or Sen. Mike Lee (R-UT), who has introduced legislation to close the platinum coin loophole. The plain text of the law clearly allows the Treasury secretary to do this, and Jay Powell, the Fed chair and in a past career an expert on the debt ceiling and its dangers, is arguably legally required to accept the coin as a deposit.

You can also imagine more serious variations on the concept. Progressive economist Mike Konczal once proposed issuing a $20 billion coin every day to keep the government running, until Congress agrees to abolish the debt ceiling for good. And a $20 billion coin is a little less silly than a $2 trillion one, surely?

it doesn't actually represent value.

i agree, we think it does. but it doesn't.

the richest people don't produce the most, those that produce the most, are not the wealthiest. money is its own game, not a measure of value 1:1.

this is why the trillion dollar coin could be made, because its not actually a representation of value. and thus the clash between the way we instinctually think of money, and the way money actually works. im not saying it should be done, im just saying it could be done. and everyone making jokes about it, are poking fun at the very concept im bringing up, that money, doesn't actually represent value.

If it does not represent value, then you can give me all of yours.

The utility is that it facilittates trade and or commerce.

Well there is no shortage of creativity for those who are trying to kick the can. Unfortunately those foreign holders of USD and or US debt instuments wont be so amused as they will see it as a sleight of hand. The casuality will be trust..and faith in the USD.

Give me a coupla those T coins and i will put it on the Pass line at the Crap table..

Dimon says Bitcoin has no value and the govt the moment it becomes a threat to the USD will squash it with regulations..

Fed fun bucks - collect and trade them but don’t try to save them.

You mean they have no shelf life?

This also means Equities, Bonds and RE..

I don’t think anyone takes the trillion dollar coin idea seriously.

Just raise the debt limit, like was done 3X during the previous Administration without any of this fuss.

Correct - simple dilution.

It may be of value to consider the possibility that when currency is debased or inflated (buys less), stocks actually rise (maintain same present day value but have higher selling prices) as they are a safe haven for preserving capital. Look to the past market performances of South America as a guide.

The international laws changed in 2017 and the U.S. is and will be the final destination of huge amounts of foreign money. So foreign money flows will increase and offset the U.S. sellers who read the paper and listen to the news and see we are in recession and sell. The largest cap companies which are known worldwide will be bought by foreigners.