“Big Coin”

The Gimmick to Suspend the Debt Ceiling Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] “Big Coin” - “Some ideas are so stupid that only intellectuals believe them”… - Introducing “Big Coin”… - The “weird gold trick” that could partially solve the debt ceiling crisis… Recommended Link [Tech Stock Picking GENIUS Reveals #1 Play for 2021]( [Read more here...]( If you missed Tesla’s epic 743% yearly gain in 2020… Or Zoom’s 425% total return… Or Nvidia’s 122% total gain… You need to see this new presentation ASAP. According to one of the most respected tech stock pickers in America… This is the most MASSIVE profit opportunity of 2021. One that could make those other market gains look like chump change… And show everyday Americans the kind of outsized profits we saw in 2020. [Click Here To Learn More]( Annapolis, Maryland October 6, 2021 [Brian Maher]Dear Reader, “Some ideas are so stupid that only intellectuals believe them” — as noted Mr. George Orwell. Perhaps we flatter Dr. Paul Krugman by labeling him an intellectual. Yet the shoe fits his foot with astounding precision. And so he must wear it. That is, the fellow harbors ideas so stupid… he can be nothing else but an intellectual. Example: The Congress of the United States must soon locate its jack... and begin working the crank… until it elevates the existing debt roof to clear space for additional spending… else the lights go dark... and the federal government “shuts down.” Treasury Secretary Janet Yellen estimates the national strongbox will be empty by Oct. 18 absent a successful jacking. The United States government would then fall into arrears... broke, destitute, penniless. And if the gentlemen and ladies of Congress cannot locate the jack? If the two sides cannot elevate the roof? Dr. Krugman, intellectual, holds out the solution. Stupid Idea He would have the United States Mint strike a single platinum coin — a single platinum coin denominated at $1 trillion. $1 trillion! Some wags have assigned it the appropriate label, “Big Coin.” The Department of Treasury can stable this exceptional coin at the Federal Reserve. Uncle Samuel can then proceed to author checks against it. The business would open a loophole within the United States Platinum and Gold Bullion Coin Act of 1995. This loophole authorizes the Treasury to mint platinum coins. It does not limit their denominations to a specified dollar quantity. The existing debt roof need not be raised then... so long as the Treasury can draw claims upon this $1 trillion coin. From the Horse’s Mouth Do we misstate, exaggerate or distort the intellectual Dr. Krugman? We do not: On the face of it, Janet Yellen could mint a platinum coin with a face value of $1 trillion — no, it needn’t include $1 trillion worth of platinum — deposit it at the Federal Reserve and draw on that account to keep paying the government’s bills without borrowing. Affirms intellectual Laurence Tribe, who professes law at Harvard University: “The statute clearly does authorize the issuance of trillion-dollar coins.” Mr. Philip Diehl — former director of the United States Mint — claims the government can have its coin "within hours of the Treasury secretary's decision to do so.” Stamp the coin at West Point and it is but a helicopter’s flight to New York City and the Federal Reserve’s vaults at 33 Liberty St. The United States Mint will be relieved to learn it needn’t collar $1 trillion of platinum to take up the job. Recommended Link [If You Use Apps, a Smartphone or Online Banking…]( You’d better read this. Because, says world-famous futurist George Gilder, we’re headed for a stunning $16.8 trillion reboot that could impact the way you use every single one of those modern tools. It could also radically transform the way you get paid, the way you save and — maybe most of all — the way you invest for retirement. It’s all in his brand-new presentation — you’ll find it at below. What you’ll see could change our way of life, the way microchips did. The way the internet did. The way smartphones have. And, says George, it could make you exceedingly rich... [Click Here To See How]( A 1,014,198,782.96-Ounce Coin Platinum presently goes at $986 the ounce. “Big Coin” must contain 1,014,198,782.96 platinum ounces to equal $1 trillion — else it tells a bald-faced fiction. Take in hand a 1-ounce coin. Now expand it one billion fourteen million one hundred ninety-eight thousand seven hundred eighty-two... point ninety-six times. Can your hand house this coin? Can any known structure house this coin? Only the galactic intellect of Dr. Paul Krugman can house this coin — and other like intellects... For example, Rep. Jerry Nadler (D-New York). For example, Rep. Rashida Tlaib (D-Michigan). Each lawmaker, each intellect, has showered the idea with high blessings. Why Limit It to $1 Trillion? Yet questions springs immediately to mind: Why raise the debt roof at all given this simple solution? Why not merely strike a fresh platinum coin when the first is depleted? And another when that coin is depleted? And why limit it to $1 trillion? If Congress can declare a $986 per ounce coin the equal of $1 trillion... Can it not declare it the equal of $5 trillion? $12.4 trillion? Indeed… can not Congress declare it the equal of $28.8 trillion? The United States government can retire its entire debt at a stroke. Strike a $100 trillion coin and the United States would be in clover for decades and decades to come. Strike a $500 trillion coin and you have heaven extending to every corner of Earth until the end of days. Recall, the United States Platinum and Gold Bullion Coin Act of 1995 does not restrict the dollar denomination. Thus we offer you a proposal… A $1,579,050,000 Car Our minions inform us that steel accounts for some 55% of the average auto’s weight. They further inform us the average auto runs to 2,871 pounds. Our auto therefore harbors 1,579 pounds of steel. One pound of steel presently trades at perhaps $1 the pound (differing grades go at different prices). Our 1,579 pounds of steel will therefore fetch us $1,579. We wish to sell you our vehicle for scrap. But we are dissatisfied with the limited $1,579 haul. Yet we have been granted the extraordinary power to determine steel prices. Thus we declare one pound of steel the equal of $1 million. To our everlasting glee and amazement, our $1,579 auto is suddenly valued at... $1,579,050,000! It can be yours at this price. Are you ready to sign upon our dotted line? We are reasonable of course… and willing to negotiate in the spirit of generosity so typical of us. Not Even Janet Yellen Agrees With Krugman Not even such an intellect as Janet Yellen dazzles as brightly as Dr. Krugman. She labels the Big Coin business “a gimmick”: I'm opposed to it and I don't think we should consider it seriously. It's really a gimmick… [It] is equivalent to asking the Federal Reserve to print money to cover deficits that Congress is unwilling to cover by issuing debt... Dr. Krugman must certainly set the lady down as a sort of ox… an imbecile… an undersoul deaf to the music of the spheres that is audible only to intellectuals such as he. He is correct about Janet Yellen of course — but he himself is deaf to the celestial music. He mistakes banjos for harps. Yet does some metallic answer to a debt roof crisis exist, absent a truce? Yes, says Jim Rickards — at least a partial answer. But the metal is not platinum. It is gold… The “Weird Gold Trick” What people don't realize is that there's a way gold can be used to work around a debt ceiling crisis. I call it the weird gold trick, and it's never seen discussed anywhere outside of some very technical academic circles. It may sound weird, but it actually works. Here's how... When the Treasury took control of all the nation's gold during the Depression under the Gold Reserve Act of 1934, it also took control of the Federal Reserve's gold. But we have a Fifth Amendment in this country that says the government can't seize private property without just compensation. And despite its name, the Federal Reserve is not technically a government institution. So the Treasury gave the Federal Reserve a gold certificate as compensation under the Fifth Amendment (to this day, that gold certificate is still on the Fed's balance sheet). Now come forward to 1953… Recommended Link [More important than your Social Security number?]( The type of 32-digit code you’ll see here holds the keys to a market that could become bigger than the computer or even the smartphone market... Get in on the ground floor. [Click Here To Learn How]( "Fed, Give Me the Money" The Eisenhower administration was up against the debt ceiling. And Congress didn't raise the debt ceiling in time. Eisenhower and his Treasury secretary realized they couldn't pay the bills. What happened? They turned to the weird gold trick to get the money. It turned out that the gold certificate the Treasury gave the Fed in 1934 did not account for all the gold the Treasury had. It did not account for all the gold in the Treasury's possession. The Treasury calculated the difference, sent the Fed a new certificate for the difference and said, "Fed, give me the money." It did. So the government got the money it needed from the Treasury gold until Congress increased the debt ceiling. Unlike Big Coin gimmickry, this “weird gold trick” does not require fantastic manipulations of the metal price. It merely requires calibrating the Federal Reserve’s gold certificate to the present gold price. Jim authored this information when gold traded at $1,900. It presently trades at $1,765. The Treasury haul would therefore fall below the value Jim lists below. Yet it would still be handsome… Hundreds of Billions, Voila That ability exists today. In fact, it is exists in a much larger form, and here's why... Right now, the Fed's gold certificate values gold at $42.22 an ounce. That's not anywhere near the market price of gold, which is about $1,900 an ounce. Now, the Treasury could issue the Fed a new gold certificate valuing the 8,000 tons of Treasury gold at $1,900 an ounce. They could take today's market price of $1,900, subtract the official $42.22 price and multiply the difference by 8,000 tons. I've done the math, and that number comes fairly close to $500 billion. In other words, the Treasury could issue the Fed a gold certificate for the 8,000 tons in Fort Knox at $1,900 an ounce and tell the Fed, "Give us the difference over $42 an ounce." The Treasury would have close to $500 billion out of thin air with no debt. It would not add to the debt because the Treasury already has the gold. It's just taking an asset and marking it to market. It's not a fantasy. It was done twice. It was done in 1934 and it was done again in 1953 by the Eisenhower administration. It could be done again. It doesn't require legislation. Will the fiscal and monetary authority resort to this “weird gold trick” if circumstances warrant? We have no expectation that they would. Yet we believe it has far more sense in it than a $1 trillion coin of platinum. That is precisely why we believe they would mint the coin. For Washington is to the gunwales with intellectuals. And recall: “Some ideas are so stupid that only intellectuals believe them.” Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning Editor’s note: Did you catch [Jim Rickards’ urgent ZOOM call]( yesterday? Financial events are currently unfolding that Jim believes will send America spiraling through “four quarters of chaos.” Here’s some of what Jim discussed: The financial contagion that’s spreading through markets as we speak… Jerome Powell’s secret plan to end money as we know it… and why [THIS Oct. 14]( could be the most devastating date in American history. If you were unable to listen in on yesterday’s call, you can catch the entire recording [here.]( Just have a notepad at the ready because Jim gave an actionable item. [Go here now]( to see the full recording. It's free to watch. --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Brian Maher][Brian Maher]( is the Daily Reckoning's Managing Editor. Before signing on to Agora Financial, he was an independent researcher and writer who covered economics, politics and international affairs. His work has appeared in the Asia Times and other news outlets around the world. He holds a Master's degree in Defense & Strategic Studies. Add feedback@dailyreckoning.com to your address book: [Whitelist us]( Additional Articles & Commentary: [Daily Reckoning Website]( Join the conversation! Follow us on social media: [Facebook]( [LinkedIn]( [Twitter]( [RSS Feed]( [YouTube]( The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. 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