It's a Zimbabwe $100 Trillion bill. We sell them for six bucks. These are not counterfeits or made on a printer in the back office. They are real currency that was used in Zimbabwe during the height of their hyperinflation driven economy.
Supposedly, at the time, they would get you an egg or a cup of coffee.
When we sell them, we kid with the customers that they should buy an extra, send it to Washington, and our nation's financial ills will be solved. No federal debt, no unfunded liabilities in Medicare, Medicaid and Social Security. Hell, you might have a couple of extra bucks left over to do something fun with the family!
In yet another example of our own government's surreal, tenuous grasp on economic fundamentals, a proposal is floating around that would create a new $1 trillion platinum coin. This coin would be minted by the Treasury department, then given to the Federal Reserve to increase the Treasury's account balance so we can pay our bills.
With a $1 trillion coin in hand, Treasury could deposit the money into Fed accounts, and pay its debts in that manner, instead of relying on bond issuance.Silly? Not even. It is nothing more than another example of the inefficiency of government.
And none of this requires Congressional consent. Talk about an elegant solution.
The White House unsurprisingly hasn't commented on the idea. But Rep. Jerrold Nadler is on board. "I'm being absolutely serious," he told Capital NY. "It sounds silly but it's absolutely legal."
The Treasury prints up our bills and mints our coins. A new coin will require new costs to design and manufacture. Plus, you'd have to acquire something with actual tangible wealth - platinum - to spit these babies out.
They should just start adding zeros to existing currency. Problem solved. It's not like anyone thinks the dollar has much value anyways.
In case you were curious, at the current price of approximately $1,550 per ounce of platinum, the $1 trillion coin would need to contain 654,161,290 troy ounces to actually be worth $1 trillion.
It'd be a bitch to make change for a cup of coffee at Denny's....
Most folks have heard Einstein's quote about insanity - it's along the lines of, "Insanity is doing the same thing over and over, and expecting a different outcome."
Has no one in DC ever heard of the Wiemar Republic in Germany? Or Zimbabwe? Or Argentina? How about ancient Greece in 400 BC?
Dionysius ordered all money handed over to the government upon pain of death. He then reminted every coin, turning each one-drachma coin into a two-drachmae coin. The tyrant was then able to pay all his debts in full; maybe no one noticed that the real value of the coinage had been halved.Hmm. He minted coins worth less than their face amount. My bad - apparently Washington HAS been reading their history.
You know what's sad about this trillion dollar coin idea? Common Americans aren't going nuts over the fact that their government is even considering such a scam. We, too, have a surreal, tenuous grasp on economic realities.
We just don't give a shit. Hey, there's nothing in it for us to rock the boat, so why put forth the effort? As long as the Bread and Circus' continue, we don't give a damn.
It would be insane to resist. An individual can't change our national economic path, just as we can't stop the outcome.
It would be equally insane to NOT prepare for the economic storm that's coming our way. You know it's coming.
The usual "If", "When" and "How Bad" of risk management have been streamlined. "How Bad" will be a function of time. The longer it takes to stop our current economic policies - either by austerity or collapse - the worse the outcome.
"When" it will collapse is the biggest unknown. It will be driven by the actions of the government.
The "If" is a done deal.
So deal with it. You'd be insane to not act.
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