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#1 Posted by insouciant (710 posts) -

http://www.foxnews.com/politics/2013/01/07/funny-money-pundits-float-1-trillion-coin-as-answer-to-debt-ceiling-standoff/

This article says that a tiny section in the U.S. code allows the Treasury secretary to "mint and issue platinum bullion coins and proof platinum coins" of a size and denomination of "the secretary's discretion." This trillion dollar coin could then be used to pay America's debts. The idea is being floated by A Democratic congressman, a Nobel-winning economist and several prominent writers. They're absolutely serious.

I don't think China would accept a trillion dollar coin as payment.

#2 Posted by clstirens (847 posts) -

Hurray inflation

#3 Posted by Sticky_Pennies (2019 posts) -

@clstirens said:

Hurray inflation

This. The trillion dollar coin thing sounds like an awful idea.

#4 Posted by Vinny_Says (5686 posts) -
made me think of this baby :)
#5 Edited by MX (228 posts) -

What my understanding is that the coin wil be created to decrease America's debt, this way denying the republicans the chance of obstruction, if the higher debt ceiling is approved, you remove the coin from the federal bank balance and destroy it.

Now I am no expert on economics but doesn't the creation of a million dollar coin lead to a huge denomination of the value of the dollar, simillar to what happened to the Weimar Republic in the early years of the twentieth century, when they started to print money to pay off their debt and at one point, one dollar was equal to one billion weimar Mark? I might be wrong here but generally when you start printing more money into circulation, the value of the money already out in the open decreases.

So can someone explain to me why the printing of a trillion dollar platinum coin will have no effect on the value of the dollar. I guess destroying the coin after the debt ceiling has been raised will reverse any influence the minting of the coint wil have on the economy, could someone confirm/deny this theory?

#6 Posted by insouciant (710 posts) -

@MX: In the article they said the U.S. can buy the coin back once the debt ceiling has been raised. They also said, since it's just one coin, it's not the same as putting a trillion dollars worth of small denominations into circulation, so it shouldn't have the same inflation effect.

#7 Posted by insouciant (710 posts) -

@Vinny_Says: A hundred trillion dollar note!? Holy shit that's some bad inflation!

#8 Edited by Hunter5024 (5541 posts) -

I don't even understand. Wouldn't creating money just make the actual money worth less? Is our debt based entirely on the dollar, rather than some form of neutral currency? If so is the plan to pull a fast one on them by making dollars worth almost nothing so that when we pay them back the trillion dollars we are basically giving them less than we owe? It's like a country sized equivalent of the old "doll-hairs" scam. I KNOW NOTHING ABOUT ECONOMICS, but take that China. I'm going to imagine the coin is giant, sort of like the penny in the Batcave, only made of platinum.

#9 Edited by TruthTellah (8534 posts) -

@insouciant: heh. Don't let the absurdity of it make it too confusing. The trillion dollar coin idea isn't actually making new money. No new money is going into circulation. The government would mint a coin so that it becomes part of the Treasury, which can then pay its bills as planned. This is about the debt ceiling, not just fabricating money to pay off debt.

Basically, the US government has the money to pay its debts, but Congress approved more programs than the current limit on the debt can cover. That limit on how much debt the Treasury can take on is called the debt ceiling. It was actually implemented back in the early 1900s to allow the Treasury more flexibility with paying bills in case there was any issue with Congress convening to allocate more funds. So, if the Treasury isn't allowed to use more money than has been approved, the US government would default on some of its debts. The "trillion dollar coin" solution would basically be a bookkeeping trick which simply ignores the debt ceiling and allows the Treasury to use up to an additional trillion dollars that it has access to. This isn't a matter of a coin somehow adding money; it would just legally represent more available funds than are actually approved by Congress to pay debts.

So, it wouldn't add to inflation. No more than the US government just paying its debts as planned. They have already committed to spending money on keeping the government going, they have the money to spend on keeping the government going, and now they're just working out the legality of whether they can use all of the money they have to pay for keeping the government going. This is a loophole that would make using more of the money on hand toward already agreed upon expenses.

The government has the money. They have bills to pay. And they just need approval to pay those bills with the money they have. A trillion dollar platinum coin would technically make this possible and circumvent Congressional approval, but the best outcome would be Congress working out a deal to raise the debt ceiling to allow the Treasury to pay for expenses Congress has already built up.

#10 Posted by Hunter5024 (5541 posts) -

@TruthTellah: Ohhhh

#11 Posted by mlarrabee (2885 posts) -

"We'd like to thank Roosevelt, Nixon, and fiat currency. After this ceremony the US economy will be taken behind the auditorium and shot in the head. Thank you, and good night!"

#12 Edited by TruthTellah (8534 posts) -

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

#13 Posted by MX (228 posts) -

@TruthTellah: Ok this clears up my concerns about the decrease of the value of the dollar, thanks for the info.

#14 Edited by TruthTellah (8534 posts) -

@MX: Glad I could help. It's still a pretty wild idea, but like many things in government, it would just be an awkward and roundabout way of doing what needs to be done.

#15 Edited by ShaggE (6331 posts) -

What they aren't telling us is that they've put a string through the coin.

#16 Edited by hidys (1029 posts) -

It certainly is a better alternative than dealing the with shitty "debates" held in 2011 over raising the debt ceiling.

Also so it is clear THIS WOULD HAVE NO AFFECT ON INFLATION SINCE IT WOULD NEVER SEE CIRCULATION!!

#17 Posted by Scooper (7882 posts) -

A trillion dollar coin?

Won't that just be a fuck off piece of Platinum ?

#18 Posted by imsh_pl (3295 posts) -

@Hunter5024 said:

I don't even understand. Wouldn't creating money just make the actual money worth less? Is our debt based entirely on the dollar, rather than some form of neutral currency? If so is the plan to pull a fast one on them by making dollars worth almost nothing so that when we pay them back the trillion dollars we are basically giving them less than we owe?

Yes, yes and yes.

#19 Posted by JigsawIntoSpace (36 posts) -

Wasn't there an episode of the simpsons where Mr. Burns had a trillion dollar bill that was meant to be given to Europe after world war II? I think Homer tried to put it though a vending machine. Anyway, I guess our economic solutions are now being taken from cartoons, and I approve.

#20 Posted by gamerpigeon (345 posts) -

I import many Anime DVDs from the US to here in the UK. So Print away America as it will only make my money worth more and importing of DVDs cheaper. Well until the Anime DVD business goes under as a result.

#21 Posted by Bourbon_Warrior (4523 posts) -

@gamerpigeon said:

I import many Anime DVDs from the US to here in the UK. So Print away America as it will only make my money worth more and importing of DVDs cheaper. Well until the Anime DVD business goes under as a result.

Yep, and steam games cheaper

#22 Posted by Marz (5642 posts) -

hmmm maybe if the coin was actually worth a trillion dollars in platinum... but that'd be a huge coin.

#23 Posted by Cheesebob (1231 posts) -

@Marz: and possibly all the platinum in the world

#24 Edited by Toxeia (728 posts) -

The coin itself wouldn't be in circulation, but if the idea is that it gives the government enough lee-way to pay off debts and continue paying employees... isn't THAT money going to be in circulation? Inflation isn't as bad as printing a trillion singles, but it's still there.

And to you who say a weaker dollar means cheaper games/anime, does it? There was a thread recently about Microsoft points and their shitty conversion to Canadian dollars.

#25 Posted by hidys (1029 posts) -

@Toxeia said:

The coin itself wouldn't be in circulation, but if the idea is that it gives the government enough lee-way to pay off debts and continue paying employees... isn't THAT money going to be in circulation? Inflation isn't as bad as printing a trillion singles, but it's still there.

And to you who say a weaker dollar means cheaper games/anime, does it? There was a thread recently about Microsoft points and their shitty conversion to Canadian dollars.

You mean the money that would have been payed out even if the debt ceiling was raised by conventional means?

#26 Posted by John1912 (1829 posts) -

A master thief needs to steal all these trillion dollar currencies. It should be the Oceans 14. It weird how a trillion dollar coin or bill seems completely fucking stupid as its pretty much make believe currency, yet if it were a smaller, say 1 million dollars it would be taken seriously.

#27 Posted by frankfartmouth (1016 posts) -

It's a bad move politically. As it's already been pointed out, it wouldn't be put into circulation, and so shouldn't have any effect on inflation, but using a loophole to completely sidestep the Republicans is beyond brash, and it will come back to bite the entire Democratic party, without a doubt. Politicians are a retributive, petulant lot, and this would be as sharp a dick move as I could remember. Yes, the Republicans espouse a lot of nonsense, both socially and economically, but they do represent half the country, and underneath some of the extreme elements of their party, they have a legitimate platform (cut spending and entitlements, reduce size of gov't) that shouldn't just be brushed off the table like this. Despite what anyone thinks about the GOP, they are needed. Nothing can really get done without them. If Obama completely cuts them out of this conversation, they're going to go nuts and cockblock everything the Democrats try to do in the foreseeable future. Debt and entitlement spending need to be addressed, not plugged up with some stupid trick like this.

#28 Posted by Rattle618 (1463 posts) -

Of course they are being serious, the whole thing is absolutely ridiculous so it makes sense that it would be fixed in such a way. 
Also, China dont care.

#29 Posted by Giefcookie (583 posts) -

This whole thing just reminded me of this:

#30 Posted by hidys (1029 posts) -

@frankfartmouth said:

It's a bad move politically. As it's already been pointed out, it wouldn't be put into circulation, and so shouldn't have any effect on inflation, but using a loophole to completely sidestep the Republicans is beyond brash, and it will come back to bite the entire Democratic party, without a doubt. Politicians are a retributive, petulant lot, and this would be as sharp a dick move as I could remember. Yes, the Republicans espouse a lot of nonsense, both socially and economically, but they do represent half the country, and underneath some of the extreme elements of their party, they have a legitimate platform (cut spending and entitlements, reduce size of gov't) that shouldn't just be brushed off the table like this. Despite what anyone thinks about the GOP, they are needed. Nothing can really get done without them. If Obama completely cuts them out of this conversation, they're going to go nuts and cockblock everything the Democrats try to do in the foreseeable future. Debt and entitlement spending need to be addressed, not plugged up with some stupid trick like this.

This isn't a budget debate. The debt ceiling debate is a matter of should the United States pay debt that it has already incurred. The idea that there are two sides to whether or not America should pay its bills or not is laughable.

#31 Posted by frankfartmouth (1016 posts) -

@hidys: It is a budget debate. Republicans are primarily concerned with the debt ceiling because they're trying to use it as leverage to force Obama to cut spending, i.e., cut spending or we'll force you into a position where default may be real. Their priority is spending, the debt ceiling is just a chip being used in the negotiations.

The Republicans don't have much else to use as leverage. But it's real leverage. The simple fact of the matter is that we do need to cut spending. No matter what your political leanings are, that much cannot be denied. Entitlements need to be addressed. If Obama entirely sidesteps Republicans by minting this coin, he's only delaying what needs to be done, and will deepen the chasm between the parties. It's not a good move

#32 Posted by JackSukeru (5903 posts) -

Someone should steal that coin, it would be hilarious.

#33 Posted by McGhee (6094 posts) -

They're already basically doing this shit now. They create money out of thin air. It's killing the dollar. Get ready, one day you may be buying a loaf of bread with a barrel of cash, Weimar Republic style.

Kids playing with bricks of cash in Weimar Germany:

#34 Edited by Tru3_Blu3 (3184 posts) -

@JackSukeru said:

Someone should steal that coin, it would be hilarious.

Or make an espionage movie that involves the stealing of the coin.

#35 Posted by Veektarius (4590 posts) -

@TruthTellah said:

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

Taking into account that my initial understanding of the idea was wrong, suppose the US did make a coin that was worth 1 trillion dollars in terms of the actual material used, and rather than buying that material, they used the gold reserves stored in Fort Knox (and elsewhere) to do it. Then they, say, gave it to China in return for our debt. Since the coin is not actually American dollars, but rather a hunk of metal that is non-currency, and since the American Dollar's value is not based on our reserves, this would pay off debts and rather than causing inflation, cause deflation. Wouldn't it? Not that China would accept such a payment. I was just thinking it through hypothetically.

#36 Edited by Abendlaender (2761 posts) -

So, what no Simpsons reference yet? You disappoint me, internet

Edit: I'm even more disappointed in my ability to read posts

#37 Posted by McGhee (6094 posts) -

@Veektarius said:

@TruthTellah said:

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

Taking into account that my initial understanding of the idea was wrong, suppose the US did make a coin that was worth 1 trillion dollars in terms of the actual material used, and rather than buying that material, they used the gold reserves stored in Fort Knox (and elsewhere) to do it. Then they, say, gave it to China in return for our debt. Since the coin is not actually American dollars, but rather a hunk of metal that is non-currency, and since the American Dollar's value is not based on our reserves, this would pay off debts and rather than causing inflation, cause deflation. Wouldn't it? Not that China would accept such a payment. I was just thinking it through hypothetically.

This is assuming that the gold in Fort Knox is actually there anymore. No, the only way they may be able to pay China (in a way they would be satisfied) would be to start selling off land in the U.S. We are fucked, one way or another.

#38 Posted by Isaiah (172 posts) -

Or you know, we could always just raise taxes and stop increasing spending. But than again the dumb shits in the House, Senate and White House will never give up their toys. All of them are worthless shits when it comes to a balanced budget.

#39 Posted by OmegaChosen (644 posts) -

@McGhee said:

@Veektarius said:

@TruthTellah said:

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

Taking into account that my initial understanding of the idea was wrong, suppose the US did make a coin that was worth 1 trillion dollars in terms of the actual material used, and rather than buying that material, they used the gold reserves stored in Fort Knox (and elsewhere) to do it. Then they, say, gave it to China in return for our debt. Since the coin is not actually American dollars, but rather a hunk of metal that is non-currency, and since the American Dollar's value is not based on our reserves, this would pay off debts and rather than causing inflation, cause deflation. Wouldn't it? Not that China would accept such a payment. I was just thinking it through hypothetically.

This is assuming that the gold in Fort Knox is actually there anymore. No, the only way they may be able to pay China (in a way they would be satisfied) would be to start selling off land in the U.S. We are fucked, one way or another.

China...ain't a loan shark who's going to break our legs if we don't pay 'em by Friday. >_>

#40 Posted by AlexW00d (6182 posts) -

@TruthTellah: You really live up to your username.

Unless you made that all up, then you'd be a very convincing liar.

#41 Posted by Veektarius (4590 posts) -

@McGhee said:

@Veektarius said:

@TruthTellah said:

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

Taking into account that my initial understanding of the idea was wrong, suppose the US did make a coin that was worth 1 trillion dollars in terms of the actual material used, and rather than buying that material, they used the gold reserves stored in Fort Knox (and elsewhere) to do it. Then they, say, gave it to China in return for our debt. Since the coin is not actually American dollars, but rather a hunk of metal that is non-currency, and since the American Dollar's value is not based on our reserves, this would pay off debts and rather than causing inflation, cause deflation. Wouldn't it? Not that China would accept such a payment. I was just thinking it through hypothetically.

This is assuming that the gold in Fort Knox is actually there anymore. No, the only way they may be able to pay China (in a way they would be satisfied) would be to start selling off land in the U.S. We are fucked, one way or another.

Do you have some evidence that the gold was used for something? Did they mix it into our pennies just out of spite to punish people for refusing to do away with them?

#42 Posted by McGhee (6094 posts) -

@OmegaChosen said:

@McGhee said:

@Veektarius said:

@TruthTellah said:

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

Taking into account that my initial understanding of the idea was wrong, suppose the US did make a coin that was worth 1 trillion dollars in terms of the actual material used, and rather than buying that material, they used the gold reserves stored in Fort Knox (and elsewhere) to do it. Then they, say, gave it to China in return for our debt. Since the coin is not actually American dollars, but rather a hunk of metal that is non-currency, and since the American Dollar's value is not based on our reserves, this would pay off debts and rather than causing inflation, cause deflation. Wouldn't it? Not that China would accept such a payment. I was just thinking it through hypothetically.

This is assuming that the gold in Fort Knox is actually there anymore. No, the only way they may be able to pay China (in a way they would be satisfied) would be to start selling off land in the U.S. We are fucked, one way or another.

China...ain't a loan shark who's going to break our legs if we don't pay 'em by Friday. >_>

Maybe not, but they also aren't going to let the U.S. get away with it's ridiculous borrowing forever. Something has to give eventually.

#43 Posted by McGhee (6094 posts) -

@Veektarius said:

@McGhee said:

@Veektarius said:

@TruthTellah said:

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

Taking into account that my initial understanding of the idea was wrong, suppose the US did make a coin that was worth 1 trillion dollars in terms of the actual material used, and rather than buying that material, they used the gold reserves stored in Fort Knox (and elsewhere) to do it. Then they, say, gave it to China in return for our debt. Since the coin is not actually American dollars, but rather a hunk of metal that is non-currency, and since the American Dollar's value is not based on our reserves, this would pay off debts and rather than causing inflation, cause deflation. Wouldn't it? Not that China would accept such a payment. I was just thinking it through hypothetically.

This is assuming that the gold in Fort Knox is actually there anymore. No, the only way they may be able to pay China (in a way they would be satisfied) would be to start selling off land in the U.S. We are fucked, one way or another.

Do you have some evidence that the gold was used for something? Did they mix it into our pennies just out of spite to punish people for refusing to do away with them?

Nope. That's complete conspiracy theory. lol

#44 Posted by OmegaChosen (644 posts) -

@McGhee said:

@OmegaChosen said:

@McGhee said:

@Veektarius said:

@TruthTellah said:

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

Taking into account that my initial understanding of the idea was wrong, suppose the US did make a coin that was worth 1 trillion dollars in terms of the actual material used, and rather than buying that material, they used the gold reserves stored in Fort Knox (and elsewhere) to do it. Then they, say, gave it to China in return for our debt. Since the coin is not actually American dollars, but rather a hunk of metal that is non-currency, and since the American Dollar's value is not based on our reserves, this would pay off debts and rather than causing inflation, cause deflation. Wouldn't it? Not that China would accept such a payment. I was just thinking it through hypothetically.

This is assuming that the gold in Fort Knox is actually there anymore. No, the only way they may be able to pay China (in a way they would be satisfied) would be to start selling off land in the U.S. We are fucked, one way or another.

China...ain't a loan shark who's going to break our legs if we don't pay 'em by Friday. >_>

Maybe not, but they also aren't going to let the U.S. get away with it's ridiculous borrowing forever. Something has to give eventually.

They could...not buy our debt anymore? Or...less of it?

Also, China owns like 8 percent of our debt. The most out of foreign governments but still rather small. Most of the debt is owned by Americans and the American government.

So....yeah.

#45 Edited by UltorOscariot (171 posts) -

I suspect that if the coin(s) in question were minted, they wouldn't go to China. The would go to the Fed, which would in turn hand the treasury a trillion dollars(with the understanding that we would buy them back from the Fed later to destroy them). It's an explosion of the money supply. The markets would go on fire, and our currency would tank over night. Riots in the street at surging food and gas prices. I didn't vote for the President, but I do not think he would be crazy, stupid, or nefarious enough to even consider this. He'll declare the debt limit unconstitutional under the 14th amendment before this becomes a serious thought, and the Republicans will cave long before he even tries that.

#46 Posted by Gonmog (580 posts) -

I laugh at the fact that we need the GOP....We don't need any one group or a other. We need a gov that can work. and they have been stopping that, from trying to make a Dem pres look as bad as they could, to this, for almost a decade now. So fuck them, and i am glad they are on the way out.

#47 Posted by Icemo (642 posts) -

@OmegaChosen said:

@McGhee said:

@Veektarius said:

@TruthTellah said:

@Hunter5024 said:

@TruthTellah: Ohhhh

heh. Yeah. No made up money would be going to pay any debts. All this would do is make the US Treasury books look like there is a trillion dollars more, allowing them to legally use the real money they already have to pay Congressional-made debts. There would be no impact on the dollar or any markets, as everyone would be well aware of it just being a legal loophole to get around Congressional gridlock. Once the debt limit was actually increased, they would simply destroy the coin and remove it from the books as though it never existed in the first place. Since, technically, it didn't.

(Fun Fact: If the US really wanted to mint a platinum coin worth a trillion dollars, it would need to make a solid platinum coin roughly the size of a 747 jetliner.)

Taking into account that my initial understanding of the idea was wrong, suppose the US did make a coin that was worth 1 trillion dollars in terms of the actual material used, and rather than buying that material, they used the gold reserves stored in Fort Knox (and elsewhere) to do it. Then they, say, gave it to China in return for our debt. Since the coin is not actually American dollars, but rather a hunk of metal that is non-currency, and since the American Dollar's value is not based on our reserves, this would pay off debts and rather than causing inflation, cause deflation. Wouldn't it? Not that China would accept such a payment. I was just thinking it through hypothetically.

This is assuming that the gold in Fort Knox is actually there anymore. No, the only way they may be able to pay China (in a way they would be satisfied) would be to start selling off land in the U.S. We are fucked, one way or another.

China...ain't a loan shark who's going to break our legs if we don't pay 'em by Friday. >_>

CHINA DON'T CARE

#48 Posted by habster3 (3595 posts) -

@TruthTellah: When you put it that way, it doesn't sound so bad.

Still, I'm not entirely sure how I feel about this...

#49 Edited by DoctorWelch (2774 posts) -

Modern economics is so fucking stupid when you really think about it. So, essentially the government is going to take a button off of some dude's shirt, say it costs a trillion dollars, and that somehow gives them the ability to spend more money. If that isn't the dumbest thing you've ever heard, I don't know what is. And no, this isn't a work of fiction by someone on acid...it's actually something that can happen in reality.

#50 Edited by Akyho (1585 posts) -

@TruthTellah: That makes alot of sense. I first thought "Ok they hand over a trillion dollar coin......how do you break that up?" Gold is already in hundreds of diffrent shapes and sizes, bullion and bars being the most usefull in large numbers. Its like giving the bus driver a $100 note when A: he wouldnt want to give you all his change and B: he doesn't have enough.

However if the intention is to never remove the coin from the US treasury and its all a shenanigans to screw around with bureaucracy with more bureaucracy, sound plausible.

Ontop of it all the physicalities...as you said the size they would need.