Treasury Mulls Coining $1 Trillion Loophole
To get an indication of how much some in the pundit class are dreading the looming fight over the debt ceiling, consider the latest daft idea to get around the nation’s borrowing limit. A great swathe of the on-line world is abuzz with the notion of the Treasury Department “minting” a trillion dollar platinum coin, walking it over to the Fed to deposit in the government’s account and go on merrily to borrow another trillion dollars. No negotiations, no cuts and no vote by Congress.
This scenario is possible because, while US law limits Treasury’s ability to print currency and mint coins, the law is silent about coins minted from platinum. So, while the law prescribes the manner by which Treasury can mint coins made out of gold, silver and, it doesn’t contain any provisions for coins made from platinum.
This wasn’t, mind you, because the drafters of the law felt the government needed some explicit exemption to coin platinum, but rather because almost no one has ever used platinum to make coins. The only country that ever issued platinum coins as part of its currency was Imperial Russia, in the mid-19th Century. That effort was short-lived, however, because the metal is hard to work with and closely resembles less expensive metals.