http://krugman.blogs.nytimes.com/2013/01/07/be-ready-to-mint-that-coin/?smid=tw-NytimesKrugman&seid=auto 1
how big does that coin have to be? And why Platinum? Platinum is running less than gold right now (1650 vs. 1550/oz.)
I think congress has to vote on whose likeness is on such a coin. It would be killed in the House. I don't see how printing $1T worth of money (coin) out of thin air does no harm at all.
Maybe Im reading it wrong but I dont think that part matters. It wont be the metal value, it will be the coin value. Kind of like a current quarter's melt value is less than the coins worth or old gold coins melt value is more than the currency value. Some interesting numbers though.... There is roughly 133 tons of mined platinum in the world, at 29,167 troy onces per ton and 1550per ounce than there is only 3,879,211 ounces of platinum equaling $6,012,777,050 in the whole world. They say its only enough platinum to fill an average livng room. http://www.penoir.com/platinum.htm (hope my math is right that was pretty quick calculations by me)
the reason I ask is that it's pretty accepted that a quarter can be redeemed for a quarter's worth of value. I'm not sure you can go to China and say "here's a 1T coin, gimme $1T of my T-bills back!"
Im kind of spinning my head around how that would work also and how it could effect our currency. Its a new thought to me. China may acccept it if its a verified currency that we are obligated to take back as legal tender. As to why it has to be Platinum an not Gold or even Silver, my guess is that the loop hole in the law only extends to platinum but thats just a guess.
so does this just a back door to devaluating our currency? Why stop at a trillion, cant we just pay our whole debt this way?
Scam is 100% accurate. It is the same as printing monopoly money. Unless you are backing that amount with actual gold, silver or other precious metals, then it's not worth it. The only way it could gain value is if the Treasury actually sold the coins to collectors for more than it's face value. Then and only then will a 10% platimum coin be worth more than 50 cents.
Lib's always get the blame for big spending, repulicans are just as guilty though they just have different spending agenda. Its a government problem. Interesting slightly offtopic video of the largest gold coin ever minted (as of 2007 anyway) 1 kilo worth of gold. damn http://www.youtube.com/watch?v=sizsoxDhwA8
We have been paying a lot of our debt this way. Debt that would otherwise have been run up and accounted for if it were part of the budget process. Instead, the Fed has printed near $3T in new money the past ~4 years, and used it to buy existing debt (T-Bills, corporate bonds, mortgages). Debt monetization. Where there once was debt, there is now inflated currency.
No kidding; even a pinko like me is queasy over this. The world is functioning because of the shared delusion that our currencies have value. Eventually, if steps like this become common, there will be no confidence in currency value, period. Of course, by then we may be milking goats and bartering it for eggs, so it might not matter.
