Here’s the Most Ridiculous Approach to the Debt Ceiling
In order to turn the volume down on the never-ending drama in Washington, an idea that began a couple years ago is turning into a movement. Due to a law intended to allow the Treasury Department to produce commemorative coins for collectors, the Treasury could theoretically mint a platinum coin with a face value of $1 trillion.
There are rules that hinder its use of bills and currency made from other metals, but platinum coins appear to be fair game in any denomination…
In theory, Geithner could order the West Point Mint to produce a one ounce $1 trillion platinum coin and have it sent to the Federal Reserve. Since it is legal tender, the central bank would be obligated to accept it. The coin could then be used to wipe out $1 trillion in debt or even be credited to the Treasury’s checking account at the Fed, allowing Washington to deploy another $1 trillion without issuing more debt.
The idea appears to have started from a commentator named “Beowulf,” who writes at the Monetary Realism. Other outlets such as the Washington Post and Bloomberg have also jumped on the idea, or perhaps threat that could be used to speed up the coming debt ceiling hike..
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