LET’S END THIS DEBT CEILING DEBATE WITH A $1 OZ. $1T COIN

[girl gone mad]

LET’S END THIS DEBT CEILING DEBATE WITH A $1 OZ. $1T COIN
by Cullen Roche
http://pragcap.com/lets-end-this-debt-ceiling-debate-with-a-1-oz-1t-coin">Pragmatic Capitalist

A reader points out a very interesting loophole in the debt ceiling debate that would give the US Treasury the ability to tell the US Congress to take their fearmongering and shove it you know where. Reader “Beowulf” notes:

“No, Tsy isn’t authorized to just “print” money, the Federal Reserve Act gives that power to the Fed, However, the Coinage Act grants the Secretary of the Treasury rather broad coin seigniorage authority. Geithner could sidestep the debt ceiling this afternoon by ordering the West Point Mint to coin a 1 oz. $ 1 trillion coin. Tsy can then present the jumbo coins at the NY Fed to buy back $1 trillion in Fed-held debt (the Fed has to accept it, a creditor can’t refuse legal tender paid in to settle a debt):

(h) The coins issued under this title shall be legal tender… (k) 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.”

The simple threat of doing this would end this debate right here and right now. It’s time for Congress to stop playing Russian roulette with the US economy. If you want to take a stand on spending then do so before you pass legislation that causes us to run up into the debt ceiling. Don’t use some phony law to try to scare people into thinking that we are Greece (http://pragcap.com/america-cannot-go-the-way-of-greece">something that’s entirely impossible anyhow).


http://pragcap.com/lets-end-this-debt-ceiling-debate-with-a-1-oz-1t-coin">more...

[Initech]

1. Um... they tried that on the Simpsons... didn't work.

[SolutionisSolidarity]

3. How about this time we don't give it to Mr. Burns for delivery?

Surely one of the Koch brothers can do it.

[Initech]

5. "If it's a crime to love one's country I'm guilty."

"If it's a crime to steal one trillion dollars from the government and hand it over to communist Cuba, then I'm guilty of that. And if it's a crime to bribe a jury - then so help me, I'll soon be guilty of that!"

[AverageJoe90]

2. Amen to that, Cullen! =)

Unfortunately, it's not all that likely to happen just yet.........anybody else wanna bet Max Keiser and all the other 'sound money' shillers would go nuts if their favorite metals got trounced by platinum for the top reserve currency in this country?

[WillyT]

4. K & R !!!

:kick:

[joshcryer]

6. Haha, it's funny and crazy enough that it just might work.

I like it. :)

[Jim Lane]

7. At a minimum, worth floating just to see the Republicans sputter about it.

As a serious proposal? It would certainly have a strong air of gimmickry, but Obama could go on TV and say, "Look, the Republicans won't make the rich pay their share, and I won't go along with their demand to abolish Medicare, so this is the only way to avoid a default, unless I fire all the air traffic controllers." I think the general public would accept a bit of gimmickry if it were the only way to avert a partial government shutdown.

[Aerows]

8. Now that you know

That fiat currency is just the power the government gives it, don't you see that most of this is a sham?

It's not a difficult conclusion to arrive at, and then take it to it's natural conclusion - it's all a GAME to rate you, your goods, and yourself at a certain level. They can't take away your actual productive output, but once you start letting a ratings agency determine your "worth" you are playing a game you can't win.

That's one of the main reasons people are going off the grid. If you have your own value system, it's not a matter of whether you are AAA or B-. It's a matter of you, yourself.

Your "credit rating" can determine who you are, if you play the game. If you don't, you can do remarkable things.

[SlipperySlope]

9. At least this is a serious proposal, unlike the 14th red herring.

That 14th amendment argument that was going around was driving me crazy. People were taking it seriously when even a brief study of the issue would show that it was clearly unconstitutional.

This one, however, could work. Congress has already authorized the Treasury to mint platinum coins so there is no constitutional question there. And Treasury receiving the value of seigniorage is well established.

The "loophole" here is that Congress was pretty explicit about the denominations of all coins except the platinum ones, leaving the Treasury free to create this Jumbo coin.

I say go for it.

[amborin]

10. K&R