The Magic $1 Trillion Coin

Just to note that as the talk of the mythical $1 trillion coin heats up, we had it covered back last year.

John Carney at CNBC writes:

The trillion platinum coin idea came roaring back into the headlines today when theHuffington Post splashed it across its homepage.

An obscure provision of the federal code seems to give the Treasury Secretary authority to mint platinum coins worth whatever the Secretary declares them to be. A $1 trillion coin could be deposited with the Federal Reserve, which would allow the government to continue spending money even if it were barred from issuing more debt.

But can the government really pay its bills with a trillion dollar coin? Is it legal for the Treasury to create $1 trillion dollars out of nowhere?

The idea isn’t a new one—it first came upthe last time we neared the debt ceiling, in the summer of 2011—but it isincreasingly gaining mainstream credibility. Paul Krugman approvingly mentioned it earlier this week. Congressman Jerry Nadler, the Democrat from New York, endorsed the concept in an interview with Capital NY. Business Insider explains why minting the coin wouldn’t be massively inflationary or destroy the value of the dollar. Bloomberg’s Josh Barro discussed an interesting twist on the idea yesterday. The hastag #mintthecoin has become ubiquitous on Twitter.

This , more than anything, indicates the belief that liberals have that government can do anything in the world that it wants without repercussion. We see it all the time – there is no debt problem because we say there in no debt problem, there is no Islamist jihad problem because we say that there is not, there is no spending problem because we say there is no spending problem. Their reality is based on nothing but a fairy tale belief that things are what the are because that is what they want them to be.

Look at a $1 bill.

Since we came off the gold standard, the fiat money we use today is backed only by the “full faith and credit” of the US government. It is a worthless peice of paper only given value because the government says it worth $1 and we accept that. The minute that the population stops believing that it is worth a dollar, the monetary system will collapse – Hell, most of our “money” isn’t physical money at all, it is just a promise to pay.

This kind of chicanery with the $1 trillion coin might just be ridiculous enough to finally collapse the system if these morons want to play that game. As one commenter said, if we can just print money to pay our bills, why do we even need taxes?

These fools are simply children playing make-believe. One day, people will wake up and walk away from them and they will fictionally receive the scorn that they deserve. People like Krugman are only smart because people around him keep telling him that he is.

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11 thoughts on “The Magic $1 Trillion Coin

  1. “Gold is not neccesary. I have no interest in gold. We will build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That’s the bastion of money.”

    “For the folk-community does not exist on the fictitious value of money but on the results of productive labour, which is what gives money its value.”

    Guess who said those words (same guy in both quotes)? I ask because Utah’s post is related in that we’re dealing with the same principle: a total disregard for the principles of sound money and economic law. Which then takes us to this pearl of wisdom uttered by a far wiser man and true patriot:

    “All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit, and circulation.”

    –John Adams

      • Sirius is a Dog star worshipped Millenia ago by Gytshins on Denial and other African tribes in the west of the dark continent……only those still swimmin in da waters of Denial believe that a yellowy metal can save us !!

        Platinum is likewise for numskulls as it is a Catalyst in Converters…..but the O-messiah has converted our economy to a sanner one based on ‘Lectricity cars so we have no more need of the Platinumskull platapus metal….which will soon join silver as a ‘gutter metal’

        Oh yeah………you can’t eat Gold or the Platinum group either……….. ;- )) . Ben doesn’t like ‘ um so who am I to disagree.

        • Don,

          Ah, but here’s the rub: precious metals are not supposed to be an investment, it is meant to preserve what you have — and that’s why they are the only way to cement a sound monetary system. Anything else is just pissing in the wind: it only works so long as everyone else buys into the BS you have to shovel to convince them paper is worth something more than gold.

          • Actually Gold is both a preservative and an investment. Anything with double digit swings in a medium timeframe is an investment worthy of profit taking.
            It’s important to separate which bling is for flipping and which sits on the Jam shelf with the other jellies and preserves, NEVER mix the two. Because in the world of Paper “They” can stay irrational a lot than “we” can stay solvent…….Just beware of GLD.

            In the Paper world they count on CONvenience and CONsensus to stay in the game…….When the CON is up it really is as Dylan says….”blowin in the wind”

            • Don,

              I don’t worry too much about gold, but I understand its historic role in sound money/economy. Ron Paul made a comment in the debates last year that people laughed at, and those who laughed proved they do not have enough understanding to even enter a discussion about money and should sit silently and learn from those who do.

              Ron held up a dime and said it could still buy a gallon of gas today, just like when it was first minted — AND HE WAS RIGHT! He was right because that was a silver dime. You see, gold NEVER “swings” — that is an illusion. What is swinging is the value of the fake (i.e. fiat) money necessary to buy it. ;-)

              • Yes and no.

                a price swing’ intermediate or medium term’ in anything can be due TO …anything….classically supply and demand…realistically because of temporary perceptions of Under or Over valuation……the reasons for those perceptions are never known fully until after the trade opportunity is mostly past. Usually it is some form of the..”any excuse will do” ..reason to get things moving. These times are opportunity.

                The “average valuation ” of Au due to the inflation of currencies. Is a curve which is mostly the mirror opposite of that for the currencies valued in terms of Gold……..But the fluctuations from these curves are tradding opportunities mostly unrelated to the momentum of decline in the underlying Fiat. In that sense even PMs act like other assets.

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