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How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
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In accordance with industry accepted best practices we ask that users limit their copy / paste of copyrighted material to the relevant portions of the article you wish to discuss and no more than 50% of the source material, provide a link back to the original article and provide your original comments / criticism in your post with the article.
[quote:Philligan:MV8yMTAyNDY4XzM1NDI1MjA5XzZDNUI2MzVF] [quote:Anonymous Coward 23896894:MV8yMTAyNDY4XzM1NDI1MTkzXzVGMEE4RjUw] OK let's start now- failure to raise the debt ceiling is not default. Anyone who says it is default is an idiot. It just means they can't add more debt. They would still have enough incoome to pay interest on the existing debt. [/quote] They will raise the debt ceiling though, you do know that right? [/quote]
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Well my friend sent me this and I thought he was crazy but then Im watching CNBC and they have a segment on it lol
While raising the US debt ceiling has not gotten as much attention — yet — as the risk of falling off the fiscal cliff, it soon will. The limit will likely be hit soon. And if Congress fails to raise the borrowing cap, the Treasury would likely run out of money-management options to avoid a default some time in the February.
Platinum Coin Option.
There are limits on how much paper money the U.S. can circulate and rules that govern coinage on gold, silver, and copper.
BUT, the Treasury has broad discretion on coins made from platinum.
The theory goes that the U.S. Mint would create a handful of trillion dollar (or more) platinum coins. The President would then order the coins deposited at the Fed, who would then put the coin (s) in the Treasury who now can pay all their bills and a default is removed from the equation.
The effects on the currency market and inflation are unclear, to say the least. You would also likely trigger a wave of lawsuits and create two tranches of treasuries.
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link to www.aei-ideas.org
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