The idea of a trillion-dollar coin has popped up again as the U.S. Congress opens another amusing-not-amusing Kabuki theater debt-ceiling dance. Aaron Oppenheim passed along this article.
As the debt ceiling debate takes over the headlines in the U.S., so is the idea of minting a $1 trillion platinum coin, which is a surprising option available to the Treasury Department to raise the debt ceiling without bipartisan support.
The #MintTheCoin plan is gaining traction in some circles again as a deeply divided Congress makes the debt ceiling debate extra difficult, with fierce arguments on both sides of the aisle around debt, inflation, and the path forward.
The Treasury Department already began some extraordinary measures to keep paying the government's bills last week, including suspending investments for selected government accounts.
In a letter to Congress, Treasury Secretary Janet Yellen warned that there is "considerable uncertainty" around how long these extraordinary measures could be effective.
"I respectfully urge Congress to act promptly to protect the full faith and credit of the United States," Yellen said in the letter sent last week.
On the $1 trillion platinum coin loophole, which potentially allows the Treasury Department to mint platinum coins of any denomination and deposit them at the Federal Reserve in exchange for the U.S. federal debt, Yellen was very skeptical.
In an interview with The Wall Street Journal, Yellen said that the Federal Reserve is unlikely to agree to such a plan, calling the scheme a "gimmick."
"It truly is not by any means to be taken as a given that the Fed would do it, and I think especially with something that's a gimmick," she said in an interview published Sunday. "The Fed is not required to accept it, there's no requirement on the part of the Fed. It's up to them what to do."
The minting of a $1 trillion platinum coin loophole is in the law that dictates the mintage of coins. The exact wording can be found in the subsection (k) of 31 USC 5112, which governs "Denominations, specifications, and design of coins."
The clause states: "The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary's discretion, may prescribe from time to time."
Theoretically, U.S. Treasury Secretary Janet Yellen can order the platinum coin to be minted and avoid a government shutdown if the debt ceiling is not raised in time.
Important to keep in mind that the coin doesn't technically have to be made out of $1 trillion worth of platinum. It would require some platinum to be used, but it can be as small as a dime, with the U.S. Treasury assigning any value to it, including $1 trillion or even more.
To read the complete article, see:
Idea of minting $1 trillion platinum coin to avoid U.S. default is back and Yellen weighs in
To read other articles on the topic (some subscriptions required), see:
If the U.S. can't borrow more money, why not just mint a coin to fund the government?
Janet Yellen Dismisses Minting $1 Trillion Coin to Avoid Default
The Trillion-Dollar Coin Might Be the Least Bad Option
The trillion dollar coin debate is back. Experts explain if it can actually resolve the debt-ceiling crisis
To read earlier E-Sylum articles, see:
FORMER U.S. MINT DIRECTOR MOY ON THE TRILLION DOLLAR COIN
FIRM MARKETS FANTASY TRILLION DOLLAR COIN
MORE ON THAT TRILLION-DOLLAR COIN
TRILLION-DOLLAR COIN SILLY SEASON AGAIN
Wayne Homren, Editor
The Numismatic Bibliomania Society is a non-profit organization
promoting numismatic literature. See our web site at coinbooks.org.
To submit items for publication in The E-Sylum, write to the Editor
at this address: firstname.lastname@example.org
To subscribe go to: https://my.binhost.com/lists/listinfo/esylum
Copyright © 1998 - 2023 The Numismatic Bibliomania Society (NBS)
All Rights Reserved.
NBS Home Page
Contact the NBS webmaster