Treasury Tosses Out Trillion-Dollar Coin

President Obama’s administration has brought new meaning to the word “change”—as in coinage, specifically a $1 trillion platinum coin. The Treasury Department briefly considered the minting of a trillion-dollar coin (or two) as a way to get around the problematic federal debt ceiling. Apparently, an obscure law permits the Treasury Department to mint coins, but only if they are made of platinum. Normally the the minting or making of actual money (coinage or paper) is the job of the Federal Reserve (the Fed), the nation’s central bank.

Of course, such a coin would not actually contain a trillion dollars’ worth of the precious metal, presumably only enough so that the words “ONE TRILLION DOLLARS” and “IN GOD WE TRUST” were visible. In today’s markets, platinum is about equal in value to gold, roughly $1,680 per ounce. But a “coin” with enough platinum in it to be worth $1 trillion would have to weigh about 18,600 tons!

After all, the money used in and by the United States is a fiat currency. It is backed not by the value of actual precious metals but by “the full faith and credit” of the United States. If the government says the coin is worth ONE T-R-I-L-L-I-O-N DOLLARS!! then it is—so long as the Fed agrees and accepts the coin for deposit in exchange for putting said trillion bucks into the Treasury’s account.

The Federal Reserve indicated, however, that it did not agree. Treasury then withdrew the proposal, meaning the government must go back its more conventional ways of continuing deficit spending. Congress and the president will again have to reckon with raising the debt ceiling to avoid a potential default. House Republicans have passed a bill that would temporarily raise the debt limit without tying that extension to spending cuts. The bill would, however, deny legislators in Washington their pay until they get serious and pass a budget.

Image credit: © Peter Gridley/Photographer’s Choice RF/Getty Images

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  1. anonymous says:

    i dont get it

  2. person says:

    first place!!!!!!!!!!!!

  3. your mom says:

    wow… these people should focus on the bigger problems

  4. michreal delrod says:

    hello this is a very good article and proud to be merican

  5. tiffany s. says:

    loved this article very interesting