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(Washington Post)   1) Mint $2 trillion in platinum coins. 2) ???? 3) End the financial crisis   (washingtonpost.com) divider line 192
    More: Asinine, United States, Peterson Institute for International Economics, debt limit, debt crisis, gold reserves, Yale Law School, U.S. Mint  
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15874 clicks; posted to Main » on 07 Dec 2012 at 12:38 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-12-07 04:36:02 PM  
This seems like a really circuitous way of having the Federal Reserve forgive their portion of our gross debt. In an ideal world instead of us paying the Federal Reserve to buy back $2 trillion in bonds that the Federal Reserve would be unable to spend (no one could reasonably break it and they know they can't use either coin while maintaining their mission of keeping inflation under control), we'd just have the Federal Reserve surrender those bonds no questions asked if we hit the debt limit with no resolution in sight.

Then again in an ideal world we'd never have the problem come up.
 
2012-12-07 04:36:04 PM  

chumboobler: They should just make 100 of those couns and then you will be good for almost ten years! I can't see how it would negatively impact the value of the currency. I like to look at Zimbabwe as a shining example of sound monetary policy.

As a serious question though, if paying back the 16+ Trillion dollars will crash your currency, how do you ever plan on paying it back? Does it simply ensure a collosal debt at interest for all eternity?


If the world had been beating down Zimbabwe's door to buy Zimbabwean bonds, then Zimbabwe would never have had to hyperinflate in the first place. Remember, this stupid coin law makes it possible for Obama to deposit ten trillion quintillion dollars in the Fed if he wants to. That won't actually change the amount of money in circulation. But Obama can't make Congress appropriate a single dime more than it wants to, nor can he prevent the Fed from keeping the total amount of money in circulation from rising much, much less than $2T overnight. (Nor would he want to.) And the Fed will be able to do that for as long as people regard the U.S. credit in a generally favorable light, and not a Zimbabwean one.

As for your serious question, "reducing public debt as a share of GDP" and "getting the benefits of a bunch of people holding our debt" are not totally in conflict. Strange as it might sound, we really don't want to get out of debt as a nation, because (a) if we can borrow money for cheap, why not use it and (b) it gives us a little bit of leverage with our creditors. If China wanted to, it could wage economic warfare against us and screw us over pretty badly. But they can't do it without setting a few trillion of their own dollars on fire, and for that matter destabilizing the rest of the world economy, too.

You could probably make the case that we are getting to, or even past, the point of diminishing returns with our debt load. Certainly that point exists somewhere--not as X trillion dollars, but as a share of our GDP or some other proportional measure. Revenue-neutral budgets and budget surpluses that retire some of that debt are usually good things. But it's neither necessary nor desirable for the country to someday be totally debt-free.
 
2012-12-07 04:47:03 PM  

Antimatter: By the headline, I thought they were literally going to mint 2 trillion in plat coins. I wasn't sure if there was even enough platinum on earth to do that.


that would be an intriguing concept if there was actually an amount of precious metal to back up
the dollar value in circulation.
 
2012-12-07 04:59:31 PM  
If they minted then in a smaller denomination would there be enough rich idiots to buy them?
 
2012-12-07 05:01:33 PM  

MasterPython: If they minted then in a smaller denomination would there be enough rich idiots to buy them?


Glen Back could promote them on FOX.
 
2012-12-07 05:01:44 PM  

semiotix: chumboobler: They should just make 100 of those couns and then you will be good for almost ten years! I can't see how it would negatively impact the value of the currency. I like to look at Zimbabwe as a shining example of sound monetary policy.

As a serious question though, if paying back the 16+ Trillion dollars will crash your currency, how do you ever plan on paying it back? Does it simply ensure a collosal debt at interest for all eternity?

If the world had been beating down Zimbabwe's door to buy Zimbabwean bonds, then Zimbabwe would never have had to hyperinflate in the first place. Remember, this stupid coin law makes it possible for Obama to deposit ten trillion quintillion dollars in the Fed if he wants to. That won't actually change the amount of money in circulation. But Obama can't make Congress appropriate a single dime more than it wants to, nor can he prevent the Fed from keeping the total amount of money in circulation from rising much, much less than $2T overnight. (Nor would he want to.) And the Fed will be able to do that for as long as people regard the U.S. credit in a generally favorable light, and not a Zimbabwean one.

As for your serious question, "reducing public debt as a share of GDP" and "getting the benefits of a bunch of people holding our debt" are not totally in conflict. Strange as it might sound, we really don't want to get out of debt as a nation, because (a) if we can borrow money for cheap, why not use it and (b) it gives us a little bit of leverage with our creditors. If China wanted to, it could wage economic warfare against us and screw us over pretty badly. But they can't do it without setting a few trillion of their own dollars on fire, and for that matter destabilizing the rest of the world economy, too.

You could probably make the case that we are getting to, or even past, the point of diminishing returns with our debt load. Certainly that point exists somewhere--not as X trillion dollars, but as a share of our GDP or ...


Thanks for taking the time to explain that. I fix electronics for a living and find it way less complicated compared to world finance.
 
2012-12-07 05:10:09 PM  

Nutsac_Jim: Antimatter: By the headline, I thought they were literally going to mint 2 trillion in plat coins. I wasn't sure if there was even enough platinum on earth to do that.

that would be an intriguing concept if there was actually an amount of precious metal to back up
the dollar value in circulation.


Might not be NOW, but it could be arranged.

Under ISO 4217, international law/regulations stipulate that there are four precious metals that coins can be minted in: silver, gold, palladium and platinum.

Yeah, I don't know if there's a trillion dollars worth of platinum on the planet.

However, note that technically palladium is a precious metal. The Russians still occasionally mint palladium coins.

Palladium is actually quite common in asteroids. A thin seam of palladium-rich soil was part of how they figured out there was an asteroid impact tens of millions of years ago: debris from the asteroid landing across the world. A metal that is extremely rare on Earth being found in high concentrations in the soil at a layer that would have been laid down that long ago.

So, what if NASA (or private industry) snared an asteroid for mining purposes? Besides strategic metals like titanium and rare earths, the precious metal content of a large asteroid could be very substantial.
 
2012-12-07 05:22:42 PM  

Silverstaff: So, what if NASA (or private industry) snared an asteroid for mining purposes? Besides strategic metals like titanium and rare earths, the precious metal content of a large asteroid could be very substantial.


If someone did that the "precious" metals would quickly transform into "industrial" metals, valued according to regular supply & demand. Not necessarily a bad thing, as those metals are useful catalysts and are good for things like fuel cells, but it would suck for anyone whose bullion coins were suddenly only worth their face value.

Aluminum used to be a precious metal.
 
2012-12-07 05:23:17 PM  
i1134.photobucket.com
Problem solved.
 
2012-12-07 05:28:46 PM  
Hope they maintain the highest security so Biden doesn't secretly swap it for a Canadian loonie, exchanges it for 4 trillion quarters, and then off to the slots.
 
2012-12-07 05:29:03 PM  

Silverstaff: Nutsac_Jim: Antimatter: By the headline, I thought they were literally going to mint 2 trillion in plat coins. I wasn't sure if there was even enough platinum on earth to do that.

that would be an intriguing concept if there was actually an amount of precious metal to back up
the dollar value in circulation.

Might not be NOW, but it could be arranged.

Under ISO 4217, international law/regulations stipulate that there are four precious metals that coins can be minted in: silver, gold, palladium and platinum.

Yeah, I don't know if there's a trillion dollars worth of platinum on the planet.

However, note that technically palladium is a precious metal. The Russians still occasionally mint palladium coins.

Palladium is actually quite common in asteroids. A thin seam of palladium-rich soil was part of how they figured out there was an asteroid impact tens of millions of years ago: debris from the asteroid landing across the world. A metal that is extremely rare on Earth being found in high concentrations in the soil at a layer that would have been laid down that long ago.

So, what if NASA (or private industry) snared an asteroid for mining purposes? Besides strategic metals like titanium and rare earths, the precious metal content of a large asteroid could be very substantial.


The only platinum mine in the United States is here in Montana: Stillwater Mine.

It's why whenever the PGM market (Platinum Metals Group) has its prices announced the official tick ends with "PGM-SM-MT" (Platinum Metals and Groupings - Stillwater Mine - Billings, MT (home office))

They pull an average of $13,500,000 AN HOUR out of it.

/Stillwater also owns the Canadian platinum mine that sits in the Rocky Mountains. Yes, folks, one company owns ALL the platinum found or produced in North America.
 
2012-12-07 05:49:07 PM  
Since we're just pulling money out of thin air, why not make them $100 quintillilon coins. and not worry about a debt ceiling for another 30 years
 
2012-12-07 05:54:20 PM  

JackieRabbit: Some predictions are that the US will be irrelevant as a world power and economic base of the world in 50 years. I don't think it's going to take that long.


One can hope...
 
2012-12-07 06:02:21 PM  

ringersol: And you can't really approve a massive cut to revenue rates (GWB Tax Cuts)


Revenue and tax rates are not synonymous. Tax rates are not applied to a fixed number. They are applied to a variable that is typically the inverse of tax rates.

What is more: 30% of $100 or 28% of $110?
 
2012-12-07 06:04:52 PM  
Mr. Eugenides
The M3 money supply in the US is roughly 12 trillion. If the government were to create 2 trillion by fiat, a dollar would become worth about 12/14ths of a dollar or about $.86 overnight.

I don't think it's quite that straightforward, since this $2 Trillion would be effectively unspendable.

Maybe they'll put them in a museum, with a plaque that says "These small metal discs are the only thing holding up the economy".


Lawnchair
Except, you know, for this little 8000-mile-across ball they call the Earth. We actually haven't found 'more efficient' ways to grow crops.

well except for permaculture
 
2012-12-07 06:28:43 PM  

semiotix: Um, fellas, raising the debt ceiling of the federal government 16% will not mean 16% inflation. Nor will paying previously agreed-upon future expenditures any other way, including this way.

Either way, the contractors and suppliers and soldiers and government employees and Chinese bondholders who are presently already scheduled to be paid, by act of Congress, will get paid. Mostly in electrons representing dollars, a few of them in actual bills.

In Dec. 2009, the debt limit was raised to $12.4T. In Feb. 2010, less than three months later, it was raised to $14.3T. That's an increase of 15%. Did we get 15% inflation in those three months?

For that matter, in the 28 years between 1983 and 2011, the debt limit has gone up from $1.4T to $14.7T, an increase of 1,050%. Have we had average annual 8.7% inflation every year since early in the Reagan years? (I.e., do things cost 10.5 times what they did in 1983?)

These things are not the same thing. The Federal Reserve controls the money supply. It has other options besides allowing for instantaneous hyperinflation (e.g., raising the discount rate, increasing the reserve requirement, raising the federal funds rate, etc.) It will use them whether this gets done the normal way or the stupid coin way, just like it has for as long as it's been in existence.


I assume you DNRTFA. We aren't talking about raising the debt ceiling. When you raise the debt ceiling that just gives the Treasury the ability to go to someone who has pre-existing money and borrow it from them. In that scenario no new money is being created, we just owe more creditors more money, which is fine as long as they think we are good for it (the problem is eventually we won't, we will do what is being proposed here, and then the US economy goes in the toilet until we have a revolution, split into 4-8 separate countries, and begin rebuilding as separate non-global powers).

What is being proposed here as a "better" solution is precisely the same thing as printing 2 trillion in cash and then using that cash to pay back our creditors. It doesn't matter what physical form the money is, it is still generated from thin air and therefore devalues all existing money. There is a law against doing this already because of how massively damaging it is, and all this "solution" consists of is using a loophole to circumvent that law so we can screw over our economy, and by extension most of the worlds economy too. The fact that someone found a couple economists to back up the idea only shows how you can get an economist to say anything if it gets his name in the news.
 
2012-12-07 06:35:11 PM  

Debeo Summa Credo: Holocaust Agnostic: hdhale: "I like it," said Joseph Gagnon of the Peterson Institute for International Economics. "There's nothing that's obviously economically problematic about it."

Must be the Peterson Institute for International Economics for the Mentally Challenged. What a total farkwit.

A genius like you should be able to explain to us the problems then. They are so blatant after all.

Inflation is the obvious problem. But gagnon goes on to try to address that by saying the fed could offset the inflation by other measures.


Exactly how??? It just creates 2 trillion out of thin air and it enters circulation via paying for government expenses.
 
2012-12-07 06:36:29 PM  
Surely I'm not the only one that things shutting down less useful parts of the government wouldn't be such a bad thing?
 
2012-12-07 07:07:13 PM  
Are we finally ready to admit that it's all just make believe and that nothing short of shaking the etch a sketch and starting over is going to save the capitalist component? Are the rich at least ready to admit that all the make believe debt based on the make believe money is going to eventually screw their pooch, too? Are we really so desperate to pretend that 1950 v.2.0 is just around the corner if we keep printing bad IOUs?
 
2012-12-07 08:37:49 PM  

ChipNASA: Make them out of PLUTONIUM!!


Another Niven fan, I see.
 
2012-12-07 08:40:39 PM  

Bondith: They should use rhodium. It's currently worth more per mole than the other precious metals.


exoduspestcontrol.com.s59058.gridserver.com
 
2012-12-07 08:48:33 PM  

bunner: Are we finally ready to admit that it's all just make believe and that nothing short of shaking the etch a sketch and starting over is going to save the capitalist component? Are the rich at least ready to admit that all the make believe debt based on the make believe money is going to eventually screw their pooch, too? Are we really so desperate to pretend that 1950 v.2.0 is just around the corner if we keep printing bad IOUs?


Yes! But it ain't a bad IOU, it is legal free moneys, and the rest of the world has to suck it, because the have no choice.

It is nearly pure farking genius really.
 
2012-12-07 09:52:25 PM  

THX 1138: Well that pic I hotlinked lasted an entire 45 seconds. Sigh.


The replacement image does present interesting irony, however.
 
2012-12-07 09:58:38 PM  

semiotix: vygramul: EVERY economy relies on mass delusion.

Exactly. And this is why I love economics threads. I can't count how many times I've offered to trade a little bit of inherently precious gold, or a few boxes of shotgun shells, or a pallet of tinned meat, and all I want in return are a few of those worthless scraps of colored paper that the other guy just told me are completely valueless.

So far, no takers. In fact, from what I've seen of gold-bugs and other fiat-money-conspiracists, they're probably more likely to stab me in the throat for trying to take their debased, worthless pieces of illegal government scrip (etc. etc.) than anybody else.


How many of my worthless scraps of coloured paper would you wish to receive in exchange for how many shotgun shells?
 
2012-12-07 10:33:33 PM  
The President doesn't even need to do that.

The debt ceiling is blatantly unconstitutional, he can just keep spending and ignore the debt ceiling so long as Congress has budgeted the money.

Amendment 14, Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
 
2012-12-07 10:55:24 PM  
pavlopoulos.files.wordpress.com

I love the symbolism of this bill. Front: Worth as much as a pile of rocks. Back: U Wet? I'm horny.
 
2012-12-07 11:07:35 PM  
someone taking a thought experiment seriously? how interesting.
 
2012-12-07 11:08:19 PM  
What is in the TFA is functionally the same as printing paper money.

semiotix: vygramul: EVERY economy relies on mass delusion.

Exactly. And this is why I love economics threads. I can't count how many times I've offered to trade a little bit of inherently precious gold, or a few boxes of shotgun shells, or a pallet of tinned meat, and all I want in return are a few of those worthless scraps of colored paper that the other guy just told me are completely valueless.

So far, no takers. In fact, from what I've seen of gold-bugs and other fiat-money-conspiracists, they're probably more likely to stab me in the throat for trying to take their debased, worthless pieces of illegal government scrip (etc. etc.) than anybody else.


I'll gladly buy all the gold you want to sell me at $250 (in federal reserve notes) for every ozt. Oddly in every one of these threads nobody wants to sell me gold, the shiny metal they tell me has no intrinsic value at the price I offer in the pieces of paper they tell me I should have more faith in. I don't have any idea why except for the fact that they can get more paper notes from someone else. Which is the only reason you would get turned down, people can get more gold, meat, shells, whatever from someone else.

Even if a person believes paper has no real value, a person only has so much of it to trade and he's going to take the best deal to get what he does value from people who think the paper is better.
 
2012-12-07 11:09:03 PM  

boom: It is nearly pure farking genius really.


It's a mass delusion stapled to a con, is what it is.
 
2012-12-08 12:03:10 AM  
According to a reputable source, there isn't enough platinum to do that. Most of the world's supply was eaten by dragons to allow them to breathe fire.

img225.imageshack.us
 
2012-12-08 12:51:28 AM  

leadmetal: What is in the TFA is functionally the same as printing paper money.

semiotix: vygramul: EVERY economy relies on mass delusion.

Exactly. And this is why I love economics threads. I can't count how many times I've offered to trade a little bit of inherently precious gold, or a few boxes of shotgun shells, or a pallet of tinned meat, and all I want in return are a few of those worthless scraps of colored paper that the other guy just told me are completely valueless.

So far, no takers. In fact, from what I've seen of gold-bugs and other fiat-money-conspiracists, they're probably more likely to stab me in the throat for trying to take their debased, worthless pieces of illegal government scrip (etc. etc.) than anybody else.

I'll gladly buy all the gold you want to sell me at $250 (in federal reserve notes) for every ozt. Oddly in every one of these threads nobody wants to sell me gold, the shiny metal they tell me has no intrinsic value at the price I offer in the pieces of paper they tell me I should have more faith in. I don't have any idea why except for the fact that they can get more paper notes from someone else. Which is the only reason you would get turned down, people can get more gold, meat, shells, whatever from someone else.

Even if a person believes paper has no real value, a person only has so much of it to trade and he's going to take the best deal to get what he does value from people who think the paper is better.


So now you're saying it's exactly the same as fiat currency. Congratulations, you've come a long way.
 
2012-12-08 05:24:46 AM  

vygramul: leadmetal: What is in the TFA is functionally the same as printing paper money.

semiotix: vygramul: EVERY economy relies on mass delusion.

Exactly. And this is why I love economics threads. I can't count how many times I've offered to trade a little bit of inherently precious gold, or a few boxes of shotgun shells, or a pallet of tinned meat, and all I want in return are a few of those worthless scraps of colored paper that the other guy just told me are completely valueless.

So far, no takers. In fact, from what I've seen of gold-bugs and other fiat-money-conspiracists, they're probably more likely to stab me in the throat for trying to take their debased, worthless pieces of illegal government scrip (etc. etc.) than anybody else.

I'll gladly buy all the gold you want to sell me at $250 (in federal reserve notes) for every ozt. Oddly in every one of these threads nobody wants to sell me gold, the shiny metal they tell me has no intrinsic value at the price I offer in the pieces of paper they tell me I should have more faith in. I don't have any idea why except for the fact that they can get more paper notes from someone else. Which is the only reason you would get turned down, people can get more gold, meat, shells, whatever from someone else.

Even if a person believes paper has no real value, a person only has so much of it to trade and he's going to take the best deal to get what he does value from people who think the paper is better.

So now you're saying it's exactly the same as fiat currency. Congratulations, you've come a long way.


Once thing I have learned on the various informational exchanges in the Internet is few people have any real grasp of monetary theory. I am not saying that I do, but I know that I do not the certainly many other people have. One thing I do understand very clearly is money never stops. Money is much like electricity and water systems, it has to flow under pressure. It is a representation of the goods and services available to exchange in an economy, and it does not represent some zero sum game.
 
2012-12-08 08:01:32 AM  
I...seem to recall
Bo Gritz talking quite earnestly about this somewhere around 1991 or so.

I think he even mentioned pot-metal as the prospective coin's material as well.

Wouldn't it be lulzy if Obama took this idea just seriously enough to discuss it, even though he ended up not going any further with it, and the tea party got wind of it?
 
2012-12-08 09:58:21 AM  

LS1Bird: [pavlopoulos.files.wordpress.com image 410x412]

I love the symbolism of this bill. Front: Worth as much as a pile of rocks. Back: U Wet? I'm horny.


no it's worth $100 trillion and that's exactly what the US should be doing right now.
 
2012-12-08 12:23:10 PM  

bunner: Are we finally ready to admit that it's all just make believe and that nothing short of shaking the etch a sketch and starting over is going to save the capitalist component? Are the rich at least ready to admit that all the make believe debt based on the make believe money is going to eventually screw their pooch, too? Are we really so desperate to pretend that 1950 v.2.0 is just around the corner if we keep printing bad IOUs?


no, the con still works
/when all of the people, all of the time, etc., then we need a new con
 
2012-12-08 01:00:42 PM  

Dimensio: How many of my worthless scraps of coloured paper would you wish to receive in exchange for how many shotgun shells?


Let's say, one hundred fake worthless paper dollars per shell. I think that's pretty generous. I mean, that shell is useful. You could feed your family with the bird or varmint you shot with it. All I'm getting is worthless paper!

leadmetal: Even if a person believes paper has no real value, a person only has so much of it to trade and he's going to take the best deal to get what he does value from people who think the paper is better.


I don't know how to break this to you, but that's exactly the same as valuing it yourself. Look in the mirror. The grim face of fiat currency stares back at you!

It makes absolutely no difference whether you regard the value of a thing as intrinsic ("shiny gold is always always always valuable no matter what") or extrinsic ("the fools down at the grocery store will give me groceries in trade for this colored paper, so I'd better get as much colored paper as I can").

Incidentally, I reject your offer to buy my gold at 250 paper dollars per troy ounce, because I too acknowledge the extrinsic value of paper money (and gold!). However, if that's anywhere close to your selling price, then fark me, let's do business RIGHT NOW. ;)
 
2012-12-08 01:58:37 PM  

arentol: What is being proposed here as a "better" solution is precisely the same thing as printing 2 trillion in cash and then using that cash to pay back our creditors. It doesn't matter what physical form the money is, it is still generated from thin air and therefore devalues all existing money. There is a law against doing this already because of how massively damaging it is, and all this "solution" consists of is using a loophole to circumvent that law so we can screw over our economy, and by extension most of the worlds economy too. The fact that someone found a couple economists to back up the idea only shows how you can get an economist to say anything if it gets his name in the news.


Okay. Let's say every dollar in the world magically twinned itself overnight. Nobody planned it, no act of Congress or the Fed authorized it--it just kind of happened. Boom, everyone's dollar is worth half as much. Prices double on the spot. I agree.

That is not how this would work.

$2T in newly-created money would indeed (gradually) pour out of the Treasury's coffers and into the economy without an equivalent amount first having been sucked out of circulation by bond payments. However, there exists a thing known as the Federal Reserve Bank of the United States, a major function of which is to make sure that inflation doesn't get too high. It has three traditional means of taking money out of circulation, and one very significant nontraditional option.

The three usual ways are:

• raising the discount rate (the rate that the Fed charges commercial banks)
• raising the reserve requirement (the percentage of their outstanding loan balance that commercial banks need to keep locked away)
• raising the interbank loan rate (the rate that banks charge one another)

Now, possibly the Fed couldn't fully absorb all $2T that way (although very possibly it could, and in any event it could make a big damn dent in it.) Fortunately, the Fed is sitting on more than $2T in securities it bought through quantitative easing during the recession. About $2.618T, as of earlier this week. Selling these would suck money out of circulation just as effectively as the Treasury selling bonds... because a lot of that $2T is in US bonds.

They wouldn't even have to sell them at fire-sale prices. Stupid coin shenanigans aside, the world is still all shutupandtakemymoney.jpg when it comes to US government debt.

This will work once. Maybe twice. Beyond that, yeah, it is possible to introduce more new money than you can easily take out. It's not a permanent solution, but it is absolutely a solution for stupid manufactured crises of $2T or less.

There are a bunch of articles online to this effect, if you're curious, but I guess there's really no overcoming the "you can find someone to argue anything" tactic.
 
2012-12-08 09:28:38 PM  
OK, this is a volatile image on a sale site, it's probly gonna go POOF real quick, I didn't feel like stealing it, and so.....copy/pasta:

http://thumbs3.ebaystatic.com/d/l225/m/m0Vp6ZduGKjaFPw_vKKz7fg.jpg

SFW, natch.


It's a very nice silver coin with Apollo 11's Eagle on it, and it'd make a simply dandy design for the $2 trillion platinum supercoins.

/just thought I'd toss that in...
 
2012-12-09 12:17:17 AM  
Bonus, you could use them to play tiddlywinks!
 
2012-12-09 01:02:18 AM  

JackieRabbit: Huck And Molly Ziegler: I'm just happy to see the federal government could solve the problem along the lines of what I've recommended for a long time: Under cover of darkness, and without telling anyone, a crew fires up the machinery at one of our paper-money-making plants and churns out a trillion or so dollars.
Those dollars go into circulation, everybody has more money, they can pay more for stuff - and tax revenue goes up.
The important thing is, the gov't CAN'T TELL anyone they did this, because otherwise people would just run around whining about "inflation," "wheelbarrows" and "Germany."

You're welcome.

You've never studied macroeconomics have you? The government tried this stupid trick back in the lat 1970s and early 1980s in an attempt to end a recession. All it did was create double-digit inflation that took almost six years to get under control. The Fed must balance how much money is in circulation based on GDP to keep inflation in check.



The gov minted money like crazy from about 2002 to 2006 or later. Banks and stores alike were giving out brand new bills with sequential numbers, all the time.
 
2012-12-09 01:34:41 AM  

semiotix: (I.e., do things cost 10.5 times what they did in 1983?)


Land does,
 
2012-12-09 11:01:55 AM  
Psst, wanna buy a knockoff? The Franklin Mint has you covered in 1micon of precious Platinum with a stand up Plutonium plated dollar sign, but wait!

Just take the forged bills out of circulation and you solve more than this problem.
There is no cure other than reissuing the currency. Offshore bank accounts need not apply.
 
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