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Art Cashin On The Trillion Dollar Coin Alchemy

Tyler Durden's picture





 

It would appear that even the venerable Art Cashin had to rub his eyes in incredulity at the recircling of the idea of the Treasury minting a "Trillion Dollar Platinum Coin" to solve the debt-ceiling 'problem'. His brief discussion on the idea is summed up perfectly in his final six words "anybody got an ebook on alchemy?"

 

Via Art Cashin: The Mayans Weren't The Only Ones With Strange Ideas

With a debt ceiling battle about to resume, a rather bizarre idea from last year's debate has resurfaced. It appeared on a couple of blogs and concerned the minting of a "trillion dollar platinum coin". Under section K of Federal law, the Treasury Secretary appears to have carte blanche on the design and issuance of platinum coins.

 

The Treasury normally writes checks against the taxes it collects. When the tax receipts run out, they borrow money (bonds) to write checks against. That borrowing can run up into the debt ceiling, resulting in the looming confrontation.

 

The thesis claims that Geithner should authorize the coin, deposit it at the New York Fed and write checks against it, rather than selling more bonds.

 

Anybody got an eBook on alchemy?

Only those who have no clue about the money creation process in a fractional reserve economy could be vacuous enough to suggest that an idiotic "fix" such as this has any hope of working. All the proposal does, in effect, is suggest a devaluation of the currency relative to an absolute precious metal asset, which in itself is nothing new, and most recently was conducted, with great "success" by FDR in the 1930s.

 


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Fri, 01/04/2013 - 11:00 | Link to Comment Everybodys All ...
Everybodys All American's picture

Tyler...Any idea how big the platinum coin would have to be if it actually represented a trillion dollars? Might be a good visual.

Fri, 01/04/2013 - 11:46 | Link to Comment Dr. Sandi
Dr. Sandi's picture

It would be exactly as big as they want it to be. Since the platinum has the same purpose in the Trilly as copper has in the Penny, it really doesn't matter how much is in it. Just as long as it works correctly in the Trillion Dollar vending machines.

Fri, 01/04/2013 - 11:00 | Link to Comment Rusty Diggins
Rusty Diggins's picture

hmmm, back of the napkin, $1,000,000,000,000 divided by a nominal $1500 an ounce = 666,666,666 ounces!

 

Who says they don't care about numerology, astrology, sacred geometry etc etc, the ole Captain chuckles at this.

 

 

Fri, 01/04/2013 - 11:02 | Link to Comment arkel
arkel's picture

Why not make the coin be worth 17 trillion? We can pay off the federal debt and have some cash to spare. 

Im smart...

Fri, 01/04/2013 - 11:04 | Link to Comment Rusty Diggins
Rusty Diggins's picture

harr! 20,833 tons! Long John Platinum!!!

 

Government program for a special casting facility, tests, studies, transportation and infrastructure to handle the beasty +++ new space programs to find platinum bearing asteroids!  brilliant.

Fri, 01/04/2013 - 11:05 | Link to Comment Orange Pekoe
Orange Pekoe's picture

Geithner should write checks against Bernanke's poop. Wait.... How do we know he isn't?!

Fri, 01/04/2013 - 11:06 | Link to Comment youngman
youngman's picture

I think the Treasury ought to have those cake guys on TV make a big cake.....that whey....pun entended...we can have our cake and eat it too

Fri, 01/04/2013 - 11:07 | Link to Comment Dr. No
Dr. No's picture

the value of the coin is different than the face value.  Ask any 1 oz. $50 gold eagle coin owner.

 

'Cause they know all they sold you was a guaranteed piece of shit. That's all it is, isn't it? Hey, if you want me to take a dump in a box and mark it "guaranteed", i will. I got spare time. 

Fri, 01/04/2013 - 11:07 | Link to Comment Fiat agnostic
Fiat agnostic's picture

A trillion dollar coin could be very small - if they wait a year or two...

Fri, 01/04/2013 - 11:08 | Link to Comment cxl9
cxl9's picture

You know they can't stop at just one. Pretty soon those trillion dollars coins will be everywhere.

Fri, 01/04/2013 - 11:08 | Link to Comment Acet
Acet's picture

Well, if minting a single $1T platinum coin is a good thing, then why not two of them? Even better, why not 100 of them?

Also, why be stuck on a denomination of $1T? Why not mint a $1 Quadrillion coin?

By the logic behind this thesis, all the economic problems of the US for now and for the next couple of decades could be solved with a $1Q platinum coin. After all, what could possibly go wrong with such a plan!?

 

Fri, 01/04/2013 - 11:12 | Link to Comment Curt W
Curt W's picture

When your government seeks gimmicks instead of solutions.

It is time for a new government.

Fri, 01/04/2013 - 11:22 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

The GOP already committed seppuku over the cliff deal, so you're 50% of the way there.

Things to ponder: When the Economist had Berlusconi on the cover, it was less than 6 months later that they went with this classically pointed finale. The Economist may be many things, but it's not above mirroring the real plays going on, from a safe distance in Time/Space.

 

Remember: Who run Barter Town?

Fri, 01/04/2013 - 18:34 | Link to Comment moldygoat
moldygoat's picture

When your government seeks gimmicks instead of solutions.

It is time for a new kind of government.

 fixed

 

 

Fri, 01/04/2013 - 11:21 | Link to Comment strangeglove
strangeglove's picture

We can borrow the Trillion from our compadres at the Zimbabwe National Bank.

Fri, 01/04/2013 - 11:24 | Link to Comment ebworthen
ebworthen's picture

What the HELL would a Trillion dollar coin do for anyone or anything?

Fri, 01/04/2013 - 11:24 | Link to Comment krispkritter
krispkritter's picture

Here's some extra metal that's just lying around...

http://www.wbng.com/news/video/Truck-Carrying-Silver-Crashes-183797061.html

 

Fri, 01/04/2013 - 11:28 | Link to Comment notadouche
notadouche's picture

Ok it's logic check time.  Someone help me understand the duplicity of thought by our "leaders".   To solve the "too much gun violence" issue the powers want to drastically reduce the amount of guns in the hands of the citizens.  Of course the political/celebrity/media elite want to be armed or have access to armed guards themselves but in general terms they want major reduction of guns in the street.

Now these same folks, in order to solve the "too much debt" problem want to INCREASE the amount of debt taken on by the government as the remedy to solve our economic problems.  

Our "leading pundits" appear to be living in Bizzaro World.  

I suppose if I looked at the big picture it appears there is a grand plan to take away what's left of the wealth of the citizen  in conjunction with unarming the citizen.  Wow maybe we are underestimating their intelligence as well as their avarice and balls.

 

Fri, 01/04/2013 - 11:32 | Link to Comment PUD
PUD's picture

You all miss the point!! The "coin" would be the diameter of the moon and weigh several thousand million billion tons. See? Real value!!

Fri, 01/04/2013 - 11:38 | Link to Comment tradewithdave
tradewithdave's picture

We started covering this platinum Soros seigniorage fiasco in June of 2011.

http://tradewithdave.com/?p=14637

Fri, 01/04/2013 - 11:40 | Link to Comment ZeroAvatar
ZeroAvatar's picture

"A trillion here,  a trillion there.............pretty soon..............."

Fri, 01/04/2013 - 11:58 | Link to Comment steve from virginia
steve from virginia's picture

 

The Treasury doesn't have to do anything silly, there need only be a 'State of Emergency' (there is already due to 9-11). The president can order the Treasury to issue demand notes (credit) in whatever amounts are needed to retire maturing debt and meet expenses (generally payroll).

 

Roosevelt did this in 1933 when the banks in the US had failed due to a shortage of currency in circulation. The entire system had been subject to a 'run on the banks'.

 

Problems? The bondholders might object that their repayment is not in the form of blood and body-parts of US citizens. However, this is an empty complaint as usual repayment is in the form of re-financing maturing loans with new loans. It is also disingenuous as the loans in the first place were simply ledger-loans. No circulating currency is ever lent (except by citizens).

 

The reason the Treasury doesn't simply offer currency is because it doesn't want to. It has hired out its financing option to the private sector for their profit and for no other reason.

 

 

 

Fri, 01/04/2013 - 12:04 | Link to Comment AldoHux_IV
AldoHux_IV's picture

At this point no idea will surprise me when it comes to monetary solutions-- the very fact that we live in a rehypothecated/repo'd world makes all this look like nobel prize winning stuff.

Fri, 01/04/2013 - 12:04 | Link to Comment edifice
edifice's picture

I have a couple of Platinum Eagles. They're beautiful coins...

Fri, 01/04/2013 - 12:05 | Link to Comment Freewheelin Franklin
Freewheelin Franklin's picture

What could possibly go wrong?

Fri, 01/04/2013 - 12:08 | Link to Comment alentia
alentia's picture

Sounds like treasury has $1T worth of uncollaterized platinum laying around or they are planning to confiscate all of that platinum from US citizens and make the coin.

Great idea! Money is for nothing, platinum for free!

Fri, 01/04/2013 - 12:08 | Link to Comment NoTTD
NoTTD's picture

I'll be happy to tattoo myself as worth $1T.    Checks could then be written against me.  Problem solved and no platinum wasted. 

Fri, 01/04/2013 - 12:21 | Link to Comment Bugsquasher
Bugsquasher's picture

So let's see here.  The Mint produces a 10 troy lbs coin and gives it a book value of $1Trillion.  By my calculations then that single 1/2 troy oz platinum coin I have will then be worth $4.1666 Billion. PLEASE, PLEASE, PLEASE, Mr Fed do it, do it NOW!

Fri, 01/04/2013 - 12:43 | Link to Comment AgAu_man
AgAu_man's picture

Are we talking about the same "Art Cashin" whotalked about the "Planetary Alignment... and the Mayan Apocalypse"?

http://www.businessinsider.com/art-cashin-planetary-alignments-2012-12

If so, I did not know that he was such an expert on different topics.  Wow.

Fri, 01/04/2013 - 12:41 | Link to Comment de Cosmos
de Cosmos's picture

A "Trillion Dollar Platinum Coin" is not a coin; rather, it is a token of utter bankruptcy.

Fri, 01/04/2013 - 13:00 | Link to Comment grunk
grunk's picture

I'll sell Timmy  a one ounce platinum coin for a half trillion, just pay me in gold.

Fri, 01/04/2013 - 13:16 | Link to Comment fig_newton Trader
fig_newton Trader's picture

The coin would weigh about 40 million pounds. Lol

Fri, 01/04/2013 - 13:34 | Link to Comment Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Actually, Mr. Tyler:

 

You're wrong here - the platinum coin so issued would not, I assure you, have a genuine worth of a trillion dollars.  It would simply be a nominal/face value.

 

Without claiming the idea is good, bad, or even lawful - the idea, I think, doesn't involve, say, handing over to the fed whatever gold the us government has to pay off debts to the fed.

 

And it wouldn't involve 'devaluing' the currency {the federal reserve note} because in essence, you're giving the fed a near worthless coin with '$trillion' on it, which is "legal tender" and so which the fed would have to accept for debts owed to it by the federal government

Actually - it's if anything the opposite of devaluation.  You'd be magically removing $1 trillion from circulation, which, in theory, should increase the value of each dollar.

 

Of course, the idea is just to do this so congress can keep spending more.  As the left sees it, the whole issue is a legal loophole to enable the Congress to spend without limit, and not intended as any sort fo fix or reformation of our insanely idiotic monetary system/

 

 

Rethink this one - I think you sort of are looking at it wrong  {and yeah - I'm willing to be convinced that somehow I'm the one looking at it wrong and be junked back to the Stone Age... but I think I'm right}.

Fri, 01/04/2013 - 13:54 | Link to Comment Sokhmate
Sokhmate's picture

The coin will have to be an alloy of Gullibillium and Absurdium, plenty of that all around. So no problem.

Fri, 01/04/2013 - 14:16 | Link to Comment Zombie Investor
Zombie Investor's picture

So the Unicorn is going to stop shitting out Skittles and start shitting out platinum coins?

Fri, 01/04/2013 - 14:25 | Link to Comment tnquake
tnquake's picture

I wonder how many "Bernakes" (new trillion dollar coin) will be needed to buy a Super Grande Latte with skim milk and double-shot of expresso at Starbucks after TSHTF? I need to budget accordingly...

Fri, 01/04/2013 - 14:35 | Link to Comment champagnesabre
champagnesabre's picture

I think I can support this! Platinum to silver at 52:1... An ounce of platinum would make silver $191,000,000 per ounce! Or, is it 1.91 billion /oz or 191 billion /oz.... too many f'n zeros.

Silver bitchez!!!

Mon, 01/07/2013 - 05:49 | Link to Comment Anasteus
Anasteus's picture

Some variations on the "Trilly" theme

3 Myths

Trilly and Krugman

Fri, 01/04/2013 - 14:37 | Link to Comment ptoemmes
ptoemmes's picture

Oh, heck, just plate a tungsten coin of suitable size/weight and call it a day.  Happens with gold all the time.

Fri, 01/04/2013 - 14:52 | Link to Comment ilovefreedom
ilovefreedom's picture

Simpsons did it first!

Fri, 01/04/2013 - 15:15 | Link to Comment jldpc
jldpc's picture

Clueless! Clueless! Clueless! You guys always amaze me. Nobody (but Ben) gets it; but it is so simple. Fed has computer - who needs paper anyway? metal? oh pshaw! Treasury has bills to pay and needs dough to pay them. Treasury can print new currency; or borrow by issuing bills, notes, bonds, etc. Simple right? Ben turns on computer, pushes a few keys, and whala Treasury has new funds at Fed (the bank; just like you and me when we deposit our paycheck) to writee checks against - no bounced checks here. Ben credits the Treauries bonds traded/transfered to it by the Treasury; and by gosh and golly - all is well and in balance. Try this with your wife or girlfriend. It is really slick. Now when the bonds mature and all that loot is due and payable - the Fed cancels the bonds, the Treasury owes nothing, and America is saved. So why worry? What's to complain about? No harm no foul. Much to do about nothing really. Poof the debt is gone; and what none of you understand is that in effect - it was never there. And now you know why the politicians and banksters are never worried. So why should you be? 

Fri, 01/04/2013 - 15:53 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

Because the US economy, and the US dollar aren't in a closed system?

Fri, 01/04/2013 - 15:51 | Link to Comment oldgaranddad
oldgaranddad's picture

ALL coinage minted by the US Mint must be authorized by an act of law. NO EXCEPTIONS! If congress will not raise the debt ceiling what makes you think congress will pass a law to allow a coin to be made for the president to circumvent the debt ceiling?

Fri, 01/04/2013 - 16:29 | Link to Comment dscott8186
dscott8186's picture

LOL, the joke's on all of us, since when does Obama obey the Law?  It's called usurpation, in the absence of Law and in the presence of a crisis, you proceed to fill the vacuum with action.  Once Obama declares the crisis, he can do anything he deems fit.

BTW- given that this latest Fiscal Cliff was solved unconstitutionally by having a spending bill originate in the Senate instead of the House, what makes anyone think the Law means anything until those in power decide to exercise it at their discretion?  Harry Reid broke the Law for the last four years by refusing to allow a budget, is he in jail?  No. He is still leader of the Senate. The Rule of Law is now merely an arbitrary exercise of authority at the discretion of those who wield power.  Sorry pops, this isn't our country anymore.  The majority has voted and their choice was Obama.  

Fri, 01/04/2013 - 16:18 | Link to Comment Disenchanted
Disenchanted's picture

 

 

I don't know but one thing is for sure, the sumbitch that can toss such a coin can do whatever he wants.

Fri, 01/04/2013 - 16:38 | Link to Comment dscott8186
dscott8186's picture

Only those who have no clue about the money creation process in a fractional reserve economy could be vacuous enough to suggest that an idiotic "fix" such as this has any hope of working. All the proposal does, in effect, is suggest a devaluation of the currency relative to an absolute precious metal asset

 

All true but ironically wrong.  Obama and his minions have no clue about the order required to create money without creating hyper inflation.  Hence, the idiotic fix is their only solution to Congress attempting to limit their spending spree.  

Connect the dots, the devaluation of the currency is the end game to FORCE China, Japan and other US bond and currency holders to BUY US made goods to spur the US economy. This is just a nth degree play on Carter's devaluation of the dollar to make US goods appear cheaper to foreigners.  At first you will think Obama is a genius as exports go wild, then you will realize he is evil when the currency blows up because no one will be accepting US dollars for any imports or foreign trades.

Fri, 01/04/2013 - 23:18 | Link to Comment Curt W
Curt W's picture

All I can do, is shake my head in disgust,

1. That there are people who think a 2oz. coin will cause Platinum to be worth that much.

2. that they would use as much platinum as needed so the coin is worth a trillion.

3. that anybody believes that coin has any real value beyond the value of the metal.

 

Maybe they should think smaller, print one thousand really nice coins, guaranteed limited edition, and sell them for a $Billion each.

Sat, 01/05/2013 - 07:42 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

ok ok, let's see if I understand this conundrum.

Kabuki redux #1
A coin which is certainly worth far less than several trillions is to be delivered to a party owed a debt,
which is a fraction of a millionth better than a napkin writing "I am now paid in full"
which has the same financial value as another napkin saying "fuck you, I won't pay"
OR...
Kabuki redux #2
One asshole is pointing a gun at another asshole saying "I won't pay", both are assholes who have pillaged the people around them, the people are so ignorant as to believe these assholes to be creatures of power, but if anyone actually SEES one harm the other then the spell is broken and EVERYONE knows that BOTH assholes are ACTUALLY JUST ASSHOLES and can have their asses kicked with greatest of ease, so the coin is the realization that both parties MUST for their own survival put on a show to act as if they are still somehow invulnerable & therefore NO ATTEMPT to destroy, kill, maim or imprison them should even be considered?

Am I missing something or did I nail it with one of these scenarios?

Sat, 01/05/2013 - 14:10 | Link to Comment litotes
litotes's picture

As the Populist Party (i.e. KKK) candidate for President in 1992, Bo Gritz suggested the same thing:

http://www.cal-neva.com/money/debate07.htm

 

 

Sun, 01/06/2013 - 03:02 | Link to Comment resurger
resurger's picture

what teh fuck do they smoke at the terasury

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