The most recent example is the proposal that is circulating in some liberal Democrat circles that the Treasury Department should mint a $1 trillion platinum coin and put it in on deposit with The Federal Reserve. It is argued that this would allow the Obama Administration to ignore the debt ceiling limit as it would have an additional $1 trillion "on deposit" to allow it to keep on spending without having to answer to those pesky Republicans in the House.
With the coin "on deposit" with the Fed the Treasury could then draw upon the account to pay its bills without worrying about the debt ceiling. What happens when that $1 trillion is gone? Simple. Just mint another coin. While we are it, why don't we just mint a $16 trillion platinum coin and wipe out all our debt at one time? Why not start the new year with a fresh start?
The whole idea for the magical coin stems from what is an obscure provision in the law that permits the Secretary of Treasury to mint and issue platinum bullion coins for commemorative purposes.
It is incredible how creative people can get to avoid facing facts, making difficult decisions or having to step up to do the hard work necessary to fix our fiscal situation. Where is this creativity when it comes to actually solving the problem that is right in front of us?
Of course, there is no intention that the actual coin contain any but a trace amount of platinum. Perhaps just a small surface varnish to make it shine very brightly in the sun.
That got me wondering how large a true $1 trillion platinum coin would have to be if it was pure platinum?
Fortunately, Zero Hedge already did the calculation and provided a few facts to put it all in perspective.
So you want a trillion dollar platinum coin? Ok: here are some facts:
- Platinum has traditionally been the most valuable precious metal for one simple reason: it is rare.
- It is so rare, that all the platinum ever mined could fit into a 25 cubic foot box.
- The weight of that box comes out to just over 16 tons: this is how much platinum has been mined since the start of time.
- A coin valued at $1 trillion and made out of platinum would, at today's price of $1557/ounce, weigh in at 642.3 million ounces.
- 642.3 million ounces is also roughly 18 thousand tons, or about 1100 times more than all the platinum mined.
In other words, putting a coin that is worth $1 trillion in perspective to all the platinum ever mined, would look something like this:
I don't know about you but it appears to me that Lady Liberty is crying when I look at her image on that platinum coin.
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