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Subject How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously

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[quote:Anonymous Coward 30561148:MV8yMTAyNDY4XzM1NTA4ODE1XzMyOTdDM0ZB]
The math is simple... each trillion dollar coin would depreciate the dollar by about 2-4% depending on the effects of each additional coin.  The mass amount of money that is out there currently is about 54 trillion not including all real assets but liquidity of the US has been rated around 54 trillion without debts... now each coin represents a a trillion or 2% of this so with 50 coints, we have diluted the 54 trillion by about half not including debt... we could re-monetize the debt with all of these extra trillions and have a lower debt ratio but where would this stop?  We could cap it as well at say the current amount of liquidity, essentially doubling the cost of everything overnight... but what would this accomplish?  It may be that the money has to be devalued by about 30% or so to pay off the debts to get us back to even but that will raise the price of everything by over 50%, 66%+ to be exact, and if we don't pay down that debt and take out more debt, there could be more problems... plus the loss of trust and everything else that ensues... it's a bad plan to be honest.
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Original Message 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.

[link to www.aei-ideas.org]

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