The Trillion Dollar Coin – This is How Money Dies

Since the trillion dollar coin solution to the nation’s fast-approaching debt ceiling crisis has been drowning out just about everything else in the financial media in recent days, weighing in on the subject seemed like a good idea since, well, everyone else seems to be doing it as shown below via Google Trends.

Coming from more of a hard money background, the whole idea is, at first, easy to just chuckle loudly about and then move on. But, when you realize how serious some people are about this and how many of them are in a position to potentially influence policy, then it becomes a different matter.

It becomes something quite scary, with the idea of a trillion-dollar coin being a possibility, and the negative effects of such an effort could be long-lasting.

For anyone who has, somehow, managed to avoid reading about this, a Huffington Post story by Mark Gongloff does a pretty good job of filling in the details in a light-hearted way. In short, to avoid a showdown with Republicans over raising the debt ceiling, the White House could legally instruct the Treasury Department to create one or more platinum coins with a face value of $1 trillion and give this to the Federal Reserve. The Fed would then credit the Treasury’s account with a cool trillion dollars that could then be spent, thus eliminating the need to issue new debt that would violate the debt ceiling laws.

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