Biden officials float $1 trillion platinum coin scheme to monetize debt
By Mike Gleason
As global elites gathered in Davos last week to discuss their plans for controlling the world economy, the gold market delivered an alternative message.
Among the issues discussed at this year's World Economic Forum is that of central bank digital currency. A presentation at the meeting based on research funded by the Bill & Melinda Gates Foundation called for central bank digital currency to serve the goal of "redesigning access to money."
Technocrats believe that they can reshape the world economy to serve their grandiose objectives -- whether it's redistributing wealth or eliminating fossil fuels or reducing the world population.
Meanwhile, markets are reflecting some inconvenient truths. For one, demand for oil is surging. As China reopens, oil consumption is on track to set a new record this year, according to the International Energy Agency.
Demand for precious metals is also likely to be strong in 2023. The gold market continues to power ahead, sending a signal that the U.S. dollar and other fiat currencies are untrustworthy when it comes to retaining purchasing power.
Platinum is in the spotlight as a potential political solution to a trillion-dollar problem. The government has reached its statutory borrowing limit. On Thursday, Treasury Secretary Janet Yellen announced emergency measures to stave off a debt default.
Yellen has dismissed the trillion-dollar platinum coin proposal as a gimmick. Of course, she would prefer Congress simply give her the authority to issue more debt. But some within the Biden administration are taking the idea more seriously as a way to blunt any negotiations with Republicans in Congress.
Conservative legislators are demanding some spending concessions before agreeing to raise the debt ceiling. But Democrats insist the debt limit should be raised without any conditions attached.
The government will almost certainly avoid default one way or another. The fact that the Treasury Department could arbitrarily declare a one-ounce platinum coin to be worth a trillion dollars and then sell it to the Federal Reserve to raise revenue shows that hyperinflation is how a sovereign debt crisis can be resolved.
The problem with minting a trillion-dollar coin is that it then becomes too obvious what’s being done. The government would be telegraphing that it intends to monetize its debts by creating trillions of dollars out of thin air. That could cause holders of U.S. dollar assets to panic.
The Treasury would much rather go through the motions of increasing its borrowing capacity and selling more bonds to the Federal Reserve.
But the end result will be the much same. Trillions of new dollars will be created out of thin air. And over time, they will lose value.
But at some point, instead of losing value gradually, Federal Reserve notes could suffer a sudden loss of confidence. That’s what Treasury Secretary Janet Yellen hopes to avoid.
Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 50,000 customers. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.