That trillion-dollar platinum coin thing? It's not happening: report
Earlier this month came one of the more peculiar money tales of the still-young year, a news story that featured the words "trillion-dollar platinum coin" and no sense of accompanying irony.
In fact, the suggestion was very real: to address mounting national debt in the U.S., some pitched the idea of the Treasury Department minting a platinum coin worth $1 trillion, marching it over to the Federal Reserve and depositing it. Presto. Debt crisis solved, right?
Of course, the platinum coin pitch met plenty of resistance. Many dismissed it entirely, while those that didn't questioned its legality.
Well, everyone can just can it about the coin. It ain't happening, officially now, says the U.S. Treasury Department.
Some background: the first talks about the trillion-dollar platinum coin came in 2010, when it was floated as a fix-all in the comments of a monetary theory blog.
Maybe it was a preposterous idea, but it appeared to be at least justified by the law. Here's what a little-read passage in the U.S. statute reads:
"The Secretary may mint and issue bullion and proof platinum coins in accordance with such specifications, designs, varieties, denominations and inscriptions as the Secretary, in the Secretary's discretion, may prescribe from time to time."
It's a paragraph that was just vague enough people decided to run with it, taking the wording to mean the Treasury Secretary could mint any platinum coin he wanted, for any denomination he sees fit.
In reality, and what has come to light in certainty now, is that the above paragraph was meant only for collectors, who wanted platinum coins but couldn't stomach the lofty minting price.
"People couldn't afford the $600 investment, so (the Treasury) wanted the flexibility to put in smaller coinage so that people could collect them," Mike Castle, the author of the statute passage, said recently.
Inadvertently, in addition to giving the Treasury Department the power to mint platinum coins of little value, Castle had given the power to mint platinum coins of infinite value. "That was never the intent of anything that I drafted or that anyone who worked with me drafted," Castle said.
And so it ends. Not that the President of Treasury Department ever seriously considered the platinum coin as a means to put off its debt woes, but here is the official word: "Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit," a Treasury spokesperson told the Washington Post.
In other words: the Treasury's not minting any trillion-dollar coin, and even if it did the Federal Reserve wouldn't accept it as currency, anyway.
By Jason Buckland, MSN Money