Trillion Dollar Coin
- Thread starter HotRod
- Start date
Depending on amount printed, it could lead to moderate inflation or even hyperinflation and lead to attacks on the US$, which would probably eventually escalate to a war.
I read that the difference is that it would be a commemorative coin and hence wouldn't have the usual negative effect of inflation.
But if it was that easy, why not make a 5 trillion dollar coin?
It's really just an exaggerated form of the US Treasury taking some cotton and ink and turning it into a $100 bill. A $100 bill is 'worth' $100 because the US Treasury, empowered by the US government, says it is. The market, of course, has its own opinion about how much that $100 can be exchanged for.
Let's say you owe $100 and can't borrow any more, but you have the ability to write "$100" on a piece of paper, and the world accepts it as $100.
The reason why the Treasury has to do this instead of the Fed is that while the Fed can create money (as can any bank, or anything that offers credit), it has to create both government assets and government liabilities, which is limited by Congress. Treasury has the ability to create pure assets without the liability.
I don't think it's a serious proposal (though it would probably work) but an illustration of the absurdity of the dollar limit to government debt, as opposed to letting the market decide.
Let's say you owe $100 and can't borrow any more, but you have the ability to write "$100" on a piece of paper, and the world accepts it as $100.
The reason why the Treasury has to do this instead of the Fed is that while the Fed can create money (as can any bank, or anything that offers credit), it has to create both government assets and government liabilities, which is limited by Congress. Treasury has the ability to create pure assets without the liability.
I don't think it's a serious proposal (though it would probably work) but an illustration of the absurdity of the dollar limit to government debt, as opposed to letting the market decide.
(possibly dumb blonde question?). How is this any different than me writing a one million dollar cheque from my cheque book.? ( I do not have $1m). My cheque is worth $1m as long as no-one tries to cash it.
Your cheque isn't worth anything because no one will take your word for it that it's worth $1m, nor can you actually cash it for $1m. This isn't some Schrodinger's Cat thing. The US Treasury can actually create money. The equivalent would be if you wrote a $1m cheque and you have the power to tell a bank to cash it or force someone to give you $1m of goods in exchange.
The trillion dollar coin really is worth that much, and they CAN cash it, and it WILL turn into a trillion dollars. Of course, creating money changes its value, also called inflation/deflation.
Yes, but in reality, could you?
Still worth nothing in the scheme of any actual transaction, surely?
A $100 bill is just some cotton and ink, right? Why is it worth $100 in an actual transaction? Why is a Treasury issued $100 bill different from me just writing "100" on a piece of paper?
no mate, they tried the hundred trillion dollar note.
unfortunately, it wasnt made out of platinum so it couldnt solve their problems.
that kind of thinking defines a terrorist under the FBIs new code.
be careful you state belligerent.
Here's a point someone raised regarding the GFC
Why did the Government bail out the Banks rather than the people during the whole sub-prime mortgage crisis initiated by those same Banks?
If they paid down the bad loans with the trillions given to the banks, wouldn't it have achieved the same thing, but not seen as many people walk away from their houses and into tent cities and cause the domino's to fall
Why did the Government bail out the Banks rather than the people during the whole sub-prime mortgage crisis initiated by those same Banks?
If they paid down the bad loans with the trillions given to the banks, wouldn't it have achieved the same thing, but not seen as many people walk away from their houses and into tent cities and cause the domino's to fall
because the entire obamarama cabinet is made of of ex goldman sachs.
why do you think their main competitn, lehman bros, was allowed to fail but the likes of BoA and GS weren't?
why do you think their main competitn, lehman bros, was allowed to fail but the likes of BoA and GS weren't?
As a birthday present a few years ago a mate gave me a framed set of Zimbabweian notes.
The face value of the 4 notes is $180 trillion.
....and the frame is worth more.
