11 votes

Paul Krugman actually wants a trillion dollar coin minted! Wow...

Proving for all time he has no clue what he's talking about.

http://krugman.blogs.nytimes.com/2013/01/07/be-ready-to-mint...

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Precious, precious metals

If a platinum coin is valued at $1 trillion, what will gold or silver be worth?
Let's do the math.
Today, an ounce of gold costs $1,650, $97 more than an ounce of platinum at $1,553.
I guess that's why they're called precious metals. They're worth trillions of Federal Reserve Notes.

Understand the mechanism here.

They mint the coin and send it to the FED which puts it in their vault and record it as an asset of $1 trillion on their books, and at the same time create an offsetting liability, a checking account balance for the federal government of $1 trillion.

As the federal government writes checks against the account, the nation's money supply increases by the amount of these checks being deposited into Commercial banks. Now, instead of the balance being in the federal government's checking account at the FED the balance is in the Commercial banks' accounts at the FED. So not only does the money supply go up, but bank reserves go up since their accounts with the FED are part of their reserves, and if the banks can find willing borrowers, they can compound the money supply by creating checking account balances, using the new reserves, and loaning these checking account balances out at interest, further increasing the money supply.

This is Wiemar Republic and Zimbabwe finance in the electronic age. It is a printing press on steroids. Hell, they could mint a few more of these coins, deposit them at the FED, and pay off the national debt. But would they really have paid off the debt, since whoever received repayment would receive worthless dollars. Can you imagine the chaos as prices go wild.

I say do it. I think the best solution for our future is to dissolve the federal government, and this would be a sure fire way to get rid of it. We wouldn't need to take up arms; the sycophantic masses would do it for us as they wheeled out Madame Guillotine to deal with the psychopathic political class and the aristocracy that pulls their strings.

If this were fiction, who would believe it. I bet Ron Paul is astounded how the criminals who run our government have taken his effort to give us the sound money of precious metals and use it to their own nefarious purpose; talk about unintended consequences.

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

Let's be real here

$1 trillion in platinum would equal a hundred times the global supply.

An imaginary coin is not going to fix the economy.

This is nothing more than a legal work around to the debt ceiling. If Congress refuses to raise the debt ceiling - or more realistically - creates a political headache for Obama every time the ceiling is raised, then the Treasury can use its legal power to mint a platinum coin, worth "$1 trillion", and credit its accounts accordingly.

Legally, they can't just print $1 trillion, they can't just borrow $1 trillion, so they'll just 'coin' $1 trillion.

Basically, this is the same a printing $1 trillion, or rather, extending the credit line $1 trillion without any vote of congress since the treasury is already authorized to 'coin' money and hasn't yet 'coined' platinum.

Is it such a bad idea folks?

Here is an other opportunity to go along with a stupid idea to reach the goal of educating the masses on monetary policy.

I hear the coin could be made out of platinum.. what would happen if the one receiving it turned around and purchased platinum with it?

Would anyone be willing to deliver tons of platinum in exchange for a shiny platinum coin with some numbers on it?

www.youtube.com/truefictions

I try to change people every day. Do You?

No

The Treasury would put the coin deep in the vault of the NY Fed, then create a $1 trillion line of credit that it would slowly draw from - same as EVER - just no need for a vote of Congress.

Watched a video about this

Where they talked about how the president can just do this himself and doesn't need Congress at all, quote, "...by the way, none of this requires Congressional consent, so that's what makes this attractive..."

http://www.cnn.com/video/#/video/politics/2013/01/04/tsr-tod...

U.S. Constitution, Article 1, Section 8

"The Congress shall have Power...

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"

Can anyone tell me where the executive branch has the power to coin money? Can anyone tell me why posts about neutering presidential powers gets so little traction here? Electing the next president is stupid because even our choice could turn on us. Fight to make ANY president bound and restricted by the constitution instead.

Apparantly Congress passed a bill that authorized the US

Mint to mint coins in the denominations that the Mint selected. I bet this was the bill that Ron Paul pushed that gave us gold and silver eagles. Unintended consequences are everywhere.

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

In Other News

Economic guru Paul Krugman also suggested that President Obama deposit a steaming pile of crap at the Federal Reserve so Ben Bernanke can transform the chit into Federal Reserve Notes.

Why stop with a single $1 trillion coin?

Why not mint 16 of them, retire the national debt, and make gold and silver legal tender again?
Crazy, crazy idea!

.

.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Michael Nystrom's picture

If he doesn't know what he's talking about

then why does this House Republican want to pass a law to outlaw the trillion dollar coin option?

WASHINGTON -- Rep. Greg Walden (R-Ore.) is introducing legislation that would ban President Barack Obama and the U.S. Treasury from minting platinum coins to avert the debt ceiling standoff.

http://www.huffingtonpost.com/2013/01/07/platinum-coin-greg-...

Here is an explanation of the issue at hand:
http://www.dailypaul.com/268934/the-trillion-dollar-coin-exp...

To be mean is never excusable, but there is some merit in knowing that one is; the most irreparable of vices is to do evil out of stupidity. - C.B.

In the land of the insane,

In the land of the insane, it's just a matter of degrees trying to determine who is less whacko.

exactly

he's already suggested everyone pretends there's going to be an alien attack because preparing for an alien attack would be good for the economy.

Also when you consider this quote:
"If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of repercussions, the real income of the community, and its capital wealth, would probably become a good deal greater than it actually is."
John Maynard Keynes

Minting a trillion dollar coin fits in nicely.

Now...

...having read that, who believes that these people are really THAT STUPID? Obviously, they're not stupid, they're malevolent.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Good lord...

.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Michael Nystrom's picture

They may not do this

And they may not do it now, but at some point they will do something just as bad and just as dumb.

So you better have your bags packed and waiting in the closet.... just in case.

To be mean is never excusable, but there is some merit in knowing that one is; the most irreparable of vices is to do evil out of stupidity. - C.B.

And don't forget your zombie

And don't forget your zombie defense kit. ; ) In other words, the odds of this ever happening are as likely as a zombie plague.

Zombie rounds

I've bought a couple of boxes of zombie ammo . . . just in case Homeland Security unleashes the walking dead.

Is this guy a reincarnation

Is this guy a reincarnation of the Weimar Republic's finance ministers?

I read this earlier

and I laughed. That's all I can do anymore.

It's just so silly and nonsensicle.

I often think that things like this are just tests to see how far 'they' can push before they get any resistence or reaction (positive or negative), kind of like with the guns, the marijuana and all the other issues that have recently felt very 'manipulated' in nature, scope and discussion.

"The more you sweat in training, the less you bleed in battle."

Someone should ask this guy

why we need the FRB if the Treasury can just create the money? Why is there need for a middle man? LOL This is kind of a self defeating message for someone who holds the FRB so close to his chest. I don't think he thought this through.

"Mr. Krugman, you are in support of having the treasury pay off $1Trillion of debt through the manufacturing of a platinum coin with a $1 trill denomination labeled on it. So, since the FRB usually creates the money by buying T-Bills and incurring govt debt in the process, why not just get rid of the fed and have the treasury manufacture their own money without incurring debt in the process?"

He did not think his position through.lmao

“When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic.” – Dresden James

He is an embarrassment.

They honestly should put

They honestly should put Obama's face on it. It would be great historical justice.
see:
http://en.wikipedia.org/wiki/Large_denominations_of_United_S...

Southern Agrarian

I guess they could put his butt on the reverse side,

or if they really wanted to dramatic, put Michelle's fat butt there.

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

Haven't laughed so hard in a

Haven't laughed so hard in a while.
That would be awesome, a coin minted with only Michelle's arse on its face and maybe a stalk of broccoli on the reverse.

Southern Agrarian

Hahaha!

Which sparks another great business idea for me!

I've already submitted the patent for the vending machine slot that will accept it, so don't even try suckas.

Because when we go Zimbabwe Style (I dare someone to make a viral hit with that one), we're going to need them to get a 16oz soda.

No change back from the machine btw.

Ammunition -- 9mm - 40s&w - 45acp - .223/5.56x45 -- www.ammopit.com
Bulk Components starting this month also with 223 bullets!

I LOVE this idea

because a trillion dollar coin that says "United States Of America" on it will look really good next to my Zimbabwe trillion dollar bill.
OK, I don't really have a Zimbabwe bill...
And I don't really love the idea....
But I do understand a bit about "blowback" and I honestly think the gold:platinum ratio and the silver:platinum ratio would try to even this out, and that might be a lot of fun to watch.

Love or fear? Chose again with every breath.

A few people have already

A few people have already determined that such a coin would have to be absolutely gigantic to be worth $1 trillion, beyond the entire world's platinum mining output per year.

Did the math, at current

Did the math, at current price of $1558 per oz, you would need 641,848,523 oz or 18,196 metric tons of platinum to make it worth $1T.

Or you can wave your loopty doopty wand and say platinum is worth $1T per oz. Whichever works best.

Southern Agrarian