History of the Proof Platinum Coin Seigniorage Concept, 2010-2013

"Authorize the US Mint to stamp $1 billion or even $1 trillion coins. Geithner could hand-deliver them to the Federal Reserve Building as needed. :o)" (original).

"(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time. 31 USC 5112(k)" (original).

Beowulf posts again (history; original).

"The Secretary of Treasury has been delegated pretty damn broad seigniorage power (“specifications, designs, varieties, quantities, denominations, and inscriptions”). Tsy could mint a trillion dollar platinum coin (cost of minting is not related to face value) and deposit it with the Fed" (original).

Beowulf and Joe Firestone collaborate and correspond (history).

Then on 12/15/2010 there was an exchange between beo and I about platinum coin seigniorage.

Following that beo wrote me, and we corresponded by e-mail from 12/15/10, roughly until the Christmas break, exchanging views about PPCS, with me urging beo to blog it, and telling him that I would blog in support of him soon after he did.

"President Obama will have, by then, demonstrated, that by using seigniorage he can take the deficit and debt issues completely off the table." (original).

"The impact of coin seigniorage in eliminating deficits, the national debt, and bringing the debt-to-GDP ratio to zero isn't very important economically, since the size of these numbers doesn't create any solvency risk, or impair the Government's ability to sustain future fiscal activity. But that impact is very important politically and psychologically" (original).

"Joe Firestone has a new post on Coin Seigniorage, where he gives credit to our own Beowolf’s comment on this website.

As far as I’ve been able to determine, it does work operationally. It seems the US Treasury is already legally empowered to simply mint it’s own platinum coin in any denomination it wants and effectively deposit it in its Fed account, rather than sell bonds to the public to fund its Fed account" (original).

Many posts from Joe Firestone (source).

"[C}oin seigniorage, can be used to extinguish the national debt, without either reclaiming currency from the private sector by taxing, or, technically, even running a Federal defici" (original).

Open letter to Sen. Bernie Sanders (original).

[The] national debt can eventually reduced to near zero with the constant use of coin seigniorage. (original).

Wigwam posts a variation: Use the coin to buy debt from the Fed (history; original).

"The President has no choice in this matter. Congress has appropriated money for particular purposes. It has also passed a debt ceiling, and passed a law providing the Administration authority to engage in jumbo coin seigniorage to get revenue necessary to spend appropriations in the presence of the debt limit." (original).

"This idea has legs" (history; original).

Eliminate the debt limit (history; original).

LET’S END THIS DEBT CEILING DEBATE WITH A $1 OZ. $1T COIN (history; original).

"[T]he debt ceiling debate could be ended right now given that the US Constitution bestows upon the US Treasury the authority to mint coins (particularly platinum ones)." (source; original).

"I like it. Currency hacking" (original).

Reply to Salmon and Yglesias (source).

"Why Matt Yglesias and Felix Salmon are Wrong About A Legal Way to Circumvent the Debt Ceiling Impasse" (original).

"And yes, there are options that allow the executive branch to continue to deficit spend if it wanted to, ranging from issuing a multi trillion dollar platinum coin to spending under cover of the 14th amendment" (original).

“There's a Solution to the Debt Fight That Could Avert Catastrophe -- Why Is Everyone Ignoring It?” (source; original).

"Here is another option: the Treasury could mint coins to cover all the nation’s spending commitments. As Jack Balkin has pointed out, 31 U.S.C. § 5112(k) authorizes the Treasury to mint platinum coins in any denomination. Balkin suggests that the President could exercise this authority to mint a couple of trillion-dollar coins. By doing so, the President could put an end to the problem created when the Treasury’s revenues are insufficient to meet its spending commitments, without violating any existing federal law. If we accept Balkin’s interpretation of the relevant statutory provision, the central premise of Professor Buchanan’s argument—that default is guaranteed to occur under extant statutes come August 3—isn’t even true to begin with." (original).

"[Coin seigniorage] is the only solution currently being suggested that requires no agreement in Congress and also no challenge to the debt ceiling law itselfIt is the only solution currently being suggested that requires no agreement in Congress and also no challenge to the debt ceiling law itself" (history; original).

"[T]he US Mint has the ability to issue platinum coins in any denomination." (history; Original).

the President's apparent views on the debt ceiling. (history; original).

"The "jumbo coin" and "exploding option" strategies work because modern central banks don't have to print bills or float debt to create new money; they just add money to their customers' checking accounts." (history; original).

"[P]aragraph (k) was modified to specify platinum coins could be so issued in 2000, by a Republican Congress. (history; original).

"I keep hesitating to write about this because it sounds insane, but Jack Balkin’s a professor at Yale Law School..." (history; original).

Platinum baby, platinum (history; original).

"Crazy, maybe, but some of the other people involved in this mess are even more crazy." (history; original).

What If a Debt Limit Extension is Voted Down? (history; original).

"The coin seignorage idea has really caught on – not just in the blogosphere, but in the mainstream media as well." (history; original).

"Days ago, a Yale Law professor wrote an op-ed for CNN that mentioned a crazy-seeming idea..." (history; original).

"We need to tell him that we know that he can mint a platinum coin and end this" (history; original).

The Platinum Coin Hysteria of 2011 (history; original).

"Since the platinum coin(s) never circulate(s), minting and depositing the coins at the Fed cannot possibly be inflationary" (history; original).

"VJK argued that because platinum coins are defined as numismatic coins and not circulating coins (such as nickels, dimes, etc.) that means they can only be purchased by collectors (at metal price plus markup) and not the Fed (at face value). This isn’t quite accurate" (original).

"So how could President Obama have his FDR moment? Like FDR, he should signal his intentions for higher level of nominal spending and follow through on it by having the Treasury Department take take the reigns of monetary policy from the Fed. President Obama could do this by announcing a NGDP level target that would be implemented by the Treasury Department creating large-denomination platinum coins that would be deposited at the Fed and used to fund checks to the public." (original).

"[T]here are options that allow the executive branch to continue to deficit spend if it wanted to, ranging from issuing a multi trillion dollar platinum coin to spending under cover of the 14th amendment" (original).

"Why not have the Treasury mint some $1 trillion coins? This would be very inflationary. Imagine that they instead produced $1 million coins and used them to pay off bonds. People would see the money supply increasing and understand that at some point the value of the money will be going down. So people would stop rolling over bonds" (original).

"If two $1 trillion coins are legal, is this where America is at?" (original).

"If the President doesn’t go that route [14th Amendment], and he doesn’t direct his Treasury Secretary to mint a $1 trillion platinum coin, then you have a situation where House Republicans have the power to control events" (original).

Quick and Dirty Update on Platinum Easing Discussions (original).

"The super-awesome trillion dollar coin idea that I kind of love" (history; original).

"weird, but on a sounder legal basis" [than obviating the debt ceiling][/than] (history; original).

"There would really not be any additional inflationary pressures caused by a trillion coin" (original).

"The idea of minting trillion-dollar platinum coins has been a lunatic nostrum of the wacked out left for about a year" (original).

"There was a congressional hearing last week on a bipartisan bill to replace paper dollars with dollar coins. Swell idea I’m sure, however if it passes (probably too late this year but its budgetary savings might get it slipped into a budget deal), Congress would do the scarcely imaginable, it make the Trillion Dollar Coin an even more powerful tool for the Secretary of the Treasury" (original).

"That sounds utterly insane" (history; original).

"[T]he US Treasury could order the US Mint to create a platinum coin of any denomination, deposit it in the Fed’s account and the Fed could then retire some portion of the national debt in what is essentially an exchange of the bonds they hold for the coin. Then the government spends the money they were already told (by themselves) to spend and we don’t get held hostage by the very same government" (original).

"What would the Treasury do with a trillion dollar coin, you ask? Why, deposit it in their account with the Fed, of course. The Fed would then credit the Treasury's account with 1 trillion dollars" (original).

"The Trillion Dollar Coin proposal for solving the debt ceiling problem is again experiencing a blogosphere explosion this past week." (original).

"[T]he coin would have much the same impact as traditional quantitative easing. Issuing and using the coin would be just like QE I, QE II, and the ongoing QE III in impact on our system. It could be considered to be Platinum Coin Easing" (original).

Quick and Dirty Update on Platinum Easing Discussions (original).

"An emerging recommendation from some of these posts is for the President to use the TDC option as a threat in the background of his negotiations with the Republicans" (original).

"[T]heir examination of platinum coin seigniorage in the context of the debt ceiling crisis, and otherwise, is too narrow and superficial too serve us well" (original).

"The MMTers dare to utter the heretical view that money is not intended as a store of value, but instead that it is a tool to be used by government to facilitate the exchange of goods and services..." (original).

"Trillion Dollar Coin Explodes: Krugman, Congress is talking about it" (original).

"[Carney and Hayes both] see PCS as essentially a band-aid we can put on the debt ceiling problem. They don't see it as something that could introduce a profound change in the background of fiscal policy" (original).

"[The Proof Platinum Coin] demonstrates very clearly that the Government cannot run out of money, and that the claim that it can is not a valid reason for rejecting spending that is in accordance with public purpose" (original).

"Economists love old grandpa coin act as fiscal-cliff solution, or something" (original).

"These suggestions should horrify anyone who understands the importance of sound money" (original).

"[T]hen he should offer to sign a bill revoking his authority to issue platinum coins -- so long as that bill also abolishes the debt ceiling" (original).

"[E]verything you need to know about the #MintTheCoin movement" video (original).

"So the question that is relevant for us here is whether or not the law that authorizes the creation of platinum coins by the U.S. Treasury lays down an "intelligible principle" to which the Treasury is directed to conform" (original).

"[A]ll the advocates of this insidiously stupid idea which gets a new life every time there is a debt ceiling crisis, are doing, is arguing for a massive devaluation of the dollar: because for the trillion dollar coin idea to be even remotely plausible, the price of Platinum, and by implication the entire precious metals complex, would have to go up by a factor of some 1,100" (original).

"Has #MintTheCoin chatter over creation of trillion $ platinum coin re: debt ceiling reached West Wing? #FiscalCliff411"

"[N]one of this requires Congressional consent. Talk about an elegant solution" (original).

"Once a silly hypothetical and still overwhelmingly unlikely, the trillion dollar coin concept is no longer merely academic. Seething anger at broken politics is helping a nutty idea about a magic platinum coin gain mainstream currency" (original).

"This is admittedly hard to take seriously, but federal law does empower the Secretary of the Treasury to 'mint and issue platinum bullion coins and proof platinum coins.'" (original).

"Liberals Eye Platinum Coin Strategy?" (original).

Like Mayweather-Pacquiao, the fight never happens. Planned debt ceiling fight cancelled. That seems kind of easy, right? Why didn't Obama think of this before? Because no one's first resort to a debt ceiling fight is to create what is essentially a loonie on horse steroids, duh. (original).