The Trillion Dollar Coin — Risky Business
Unless you’ve been hiding under a rock lately, it’s been hard to avoid the hullabaloo over the trillion dollar platinum coin idea. Originally proposed by a commenter on a financial blog, minting a trillion dollar platinum coin is an idea hatched to sidestep a number of existing laws which either limit the ability of the government to create new gold and silver coins or limits the ability of the US Treasury to issue debt. Alas, like all things in life, there are trade-offs. As they say in economics, there are no free lunches. And if the benefit is to let the US government spend more money, what are the costs?
Fortunately, you don’t have to look to far to find the answers:
- Matt O’Brien of the Atlantic provides a comprehensive overview of the $1 trillion coin dilemma.
- In “Platinomics,” the Economist suggests that the inflationary consequences of the $1 trillion coin would be longer terms and controlled by the Fed’s new ability to pay interest on reserves.
- There’s an interesting perspective on how the coin idea might impact gold futures and credit in the Daily Capitalist.
- This piece in the Global Economic Intersection outlines how the trillion dollar coin shifts costs from the Treasury to the Fed.
These articles should provide you with an overview of the the issue. If you have an alternate perspective, please be sure to share them with us below. As always, happy hunting!
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.
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