This cockamamie scheme comes up again
Jan 22, 2023 14:53:37 #
News Report: The United States is bankrupt and they're now talking about minting a $1 trillion platinum coin. Literally, the whole point of it would be they would mint the coin and then they'd put it in a vault somewhere, and then this would give the ability of the Federal Reserve to print $1 trillion and basically use it for the government to pay all the bills.
You’ve probably heard this idea floated before in the past.
Yellen has dismissed the trillion-dollar platinum coin proposal as a gimmick. Of course, she would prefer Congress simply give her the authority to issue more debt. But some within the Biden administration are taking the idea more seriously as a way to blunt any negotiations with Republicans in Congress.
Conservative legislators are demanding some spending concessions before agreeing to raise the debt ceiling. But Democrats insist the debt limit should be raised without any conditions attached.
The government will almost certainly avoid default one way or another. The fact that the Treasury Department could arbitrarily declare a one-ounce platinum coin to be worth a trillion dollars and then sell it to the Federal Reserve to raise revenue shows that hyperinflation is how a sovereign debt crisis can be resolved.
The problem with minting a trillion-dollar coin is that it then becomes too obvious what’s being done. The government would be telegraphing that it intends to monetize its debts by creating trillions of dollars out of thin air. That could cause holders of U.S. dollar assets to panic.
The Treasury would much rather go through the motions of increasing its borrowing capacity and selling more bonds to the Federal Reserve.
But the end result will be the much same. Trillions of new dollars will be created out of thin air. And over time, they will lose value.
But at some point, instead of losing value gradually, Federal Reserve notes could suffer a sudden loss of confidence. That’s what Treasury Secretary Yellen hopes to avoid.
You’ve probably heard this idea floated before in the past.
Yellen has dismissed the trillion-dollar platinum coin proposal as a gimmick. Of course, she would prefer Congress simply give her the authority to issue more debt. But some within the Biden administration are taking the idea more seriously as a way to blunt any negotiations with Republicans in Congress.
Conservative legislators are demanding some spending concessions before agreeing to raise the debt ceiling. But Democrats insist the debt limit should be raised without any conditions attached.
The government will almost certainly avoid default one way or another. The fact that the Treasury Department could arbitrarily declare a one-ounce platinum coin to be worth a trillion dollars and then sell it to the Federal Reserve to raise revenue shows that hyperinflation is how a sovereign debt crisis can be resolved.
The problem with minting a trillion-dollar coin is that it then becomes too obvious what’s being done. The government would be telegraphing that it intends to monetize its debts by creating trillions of dollars out of thin air. That could cause holders of U.S. dollar assets to panic.
The Treasury would much rather go through the motions of increasing its borrowing capacity and selling more bonds to the Federal Reserve.
But the end result will be the much same. Trillions of new dollars will be created out of thin air. And over time, they will lose value.
But at some point, instead of losing value gradually, Federal Reserve notes could suffer a sudden loss of confidence. That’s what Treasury Secretary Yellen hopes to avoid.
Jan 23, 2023 14:37:26 #
Parky60 wrote:
i b News Report: /b The United States is bankru... (show quote)
Yellen could be Biden’s sister, they both are mentally challenged!
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