This Week's Question
Will We Ever Have a $1 Trillion Platinum Coin?
Question:
When President Obama and Congress were thinking about how to deal with the $16.4-trillion debt ceiling, there was talk of the Treasury minting a $1 trillion platinum coin. Some people even joked we should have a quadrillion-dollar coin. While these solutions have not been taken seriously, I’m wondering if currency like this would ever be necessary or even possible?
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2 thoughts on “Will We Ever Have a $1 Trillion Platinum Coin?”
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Kind regards
I believe the Fed’s operating profits are returned to the Treasury, so the Treasury effectively pays little or no interest on bonds held by the Fed anyway, and as long as the Fed continually refinances Treasury debt (buys new bonds corresponding to the Treasury’s principal payments on existing bonds), the Treasury’s bonds held by the Fed are effectively retired when the Fed buys them, even if they exist on the Fed’s books forever, so trillion dollar coins are a moot point.
As legal tender, would this coin would be an asset held by the Fed (like gold in Ft. Knox), or would it be returned to the Treasury?