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

 
Philligan
in rainbows

User ID: 2530194
United States
01/04/2013 05:02 PM

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

Last Edited by Philligan on 01/04/2013 05:03 PM
everything in its right place
Anonymous Coward
User ID: 30887249
Japan
01/04/2013 05:06 PM
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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
The Core-problem of the US of A. is that they spend to much
Money for the Occupation of Territory where they are not welcomed!

And when this do not change your Country will stay in the Red!
Philligan (OP)
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User ID: 2530194
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01/04/2013 05:08 PM

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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
The Core-problem of the US of A. is that they spend to much
Money for the Occupation of Territory where they are not welcomed!

And when this do not change your Country will stay in the Red!
 Quoting: Anonymous Coward 30887249


I agree sir from Japan, I agree
everything in its right place
Anonymous Coward
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United States
01/04/2013 05:10 PM
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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
Seen that yesterday they were talking about it on Neil Cavuto. Unbelievable...
Philligan (OP)
in rainbows

User ID: 2530194
United States
01/04/2013 05:14 PM

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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
Seen that yesterday they were talking about it on Neil Cavuto. Unbelievable...
 Quoting: Tanarus


Anything to get out of it, its like having a credit card and your paying back nobody and you can pay back with Monopoly money
everything in its right place
Anonymous Coward
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01/04/2013 05:14 PM
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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
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.
Philligan (OP)
in rainbows

User ID: 2530194
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01/04/2013 05:15 PM

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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
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.
 Quoting: Anonymous Coward 23896894


They will raise the debt ceiling though, you do know that right?
everything in its right place
Anonymous Coward
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United States
01/04/2013 05:20 PM
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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
I don't think the Fed would take those platinum coins. That idea has several holes in it. The trillion dollar coins would not be Fed money for one. Someone already said to mint a crapload of regular coins. Coins can only be used for settlement of small debts for two. for three if it worked, it would be the same as printing 3 trillion dollars, and the "dollar" would be worthless. Forget it.
Anonymous Coward
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Germany
01/04/2013 08:58 PM
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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
crazy times , i buy one coin next week
Anonymous Coward
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01/09/2013 05:11 PM
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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
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.
An Ordinary Greek
User ID: 31824543
Greece
01/10/2013 05:50 PM
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Re: How could Washington avoid a debt ceiling default? Mint a few trillion dollar platinum coins. Seriously
A rather revealing article from zerohedge shows the naivety of the "trillion dollar platinum coin".

Putting A Trillion Dollars Of Platinum In Perspective


[link to www.zerohedge.com]

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