Putting A Trillion Dollars Of Platinum In Perspective

Tyler Durden's picture




 

So you want a trillion dollar platinum coin? Ok: here are some facts:

  • Platinum has traditionally been the most valuable precious metal for one simple reason: it is rare.
  • It is so rare, that all the platinum ever mined could fit into a 25 cubic foot box.
  • The weight of that box comes out to just over 16 tons: this is how much platinum has been mined since the start of time.
  • A coin valued at $1 trillion and made out of platinum would, at today's price of $1557/ounce, weigh in at 642.3 million ounces.
  • 642.3 million ounces is also roughly 18 thousand tons, or about 1100 times more than all the platinum mined.

In other words, putting a coin that is worth $1 trillion in perspective to all the platinum ever mined, would look something like this:

Now, putting the sheer legal idiocy of the proposal aside, and CNBC's John Carney has written a good article about why it is indeed, legal idiocy, the simple reality is that for this retarded idea to work, there has to be some justifiability, or even remote credibility of the "legal tender" backing the value. Sadly as the chart above shows, there can't possibly be such justifiability.

Or can there?

Remember, as we said, the chart above is indicative of reality at today's prices. So if the Treasury plans on literally coming up with ridiculous laws, what is there to prevent it from merely coining a one ounce, or half an ounce, or one gram Platinum coin and assigning it the value of $1 trillion.

Sure it can. There is a problem with that, however: it is called currency devaluation and is also what FDR did with executive order 6102 when he confiscated America's gold - he basically devalued the US Dollar by well over half overnight (which, for all those curious, is the endgame in the current depression also, but we'll cross that bridge when we get to it).

In other words, when one strips away with all the rhetoric, all the advocates of this insidiously stupid idea which gets a new life every time there is a debt ceiling crisis, are doing, is arguing for a massive devaluation of the dollar: because for the trillion dollar coin idea to be even remotely plausible, the price of Platinum, and by implication the entire precious metals complex, would have to go up by a factor of some 1,100.

It also means the value of the paper US currency would have to go down by 1,100.

Which, by the way, is precisely what all those who wish for the Fed to continue funding America's unprecedented spending binge, which can never be satisfied by taxes alone, are hoping for.

And of course, they will eventually get it.

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Fri, 01/04/2013 - 16:42 | 3123649 unununium
unununium's picture

There will be hyperinflation of course, and all dollar holders will suffer from it.

The only question is who will benefit from creating and spending those phony nominal bux.

When the Fed prints, the Fed chooses who benefits.  As it always has.

When the US Treasury mints, the US government chooses who benefits.

 

Fri, 01/04/2013 - 16:48 | 3123687 Spitzer
Spitzer's picture

The commenter is not just talking about paper currency. He is talking about paper gold peddled by the bullion banks.

Fri, 01/04/2013 - 18:06 | 3124002 Poor Grogman
Poor Grogman's picture

.

"At least the "surplus population" will be dealt with as the lemmings leap en masse onto concrete and asphalt."

FOFOA thinks the entittled masses will simply jump out the window when the cookie jar is removed.

Really?

Fri, 01/04/2013 - 15:45 | 3123375 Harbanger
Harbanger's picture

They don't want to make a coin with a trillion dollars worth of platinum.  It's a dollars worth of platinum with a trillion dollar face value.  It's a joke, if they were serious they would give it 16 trillion value and wipe out the entire debt with magic.

Fri, 01/04/2013 - 16:08 | 3123425 Anasteus
Anasteus's picture

Tyler, annual production of platinum is about 133 metric tons

http://www.amerigold.com/why_platinum/

and estimated reserves total is more than 30,000 tons

http://www.lenntech.com/periodic/elements/pt.htm

The link you're pointing to refers to correct annual production but incorrect reserves total.

Or Friday humor?..

Sat, 01/05/2013 - 06:38 | 3124892 samcontrol
samcontrol's picture

some of them are just tired..

Fri, 01/04/2013 - 16:46 | 3123634 SilverRhino
SilverRhino's picture

Tyler you have a HUGE problem with this article. 

Following the link shows two VERY contradictory facts in that one article that is your source.  

 

  • The annual production of Platinum is about 130 tonnes.  While this seems like a substantial number, it pales in comparison when you realize that nearly 260 tonnes of steel are used in U.S. manufacturing operations daily.
  • All of the Platinum ever mined would barely fill a 25 cubic foot (7.6 cubic meter) box. The block would weigh over 16 tons.

 

Also consider that 7.6 cubic meters of Pt would be MUCH more than 16 tons ... 

  • 7.6 m3 
  • 7600000 cm3
  • 21.09 density of Pt 
  • 160,284,000 grams
  • 160,284   kg 
  • 160.284   metric ton

 

So now you have a complete miss on the weight and still have the two article issues.   

Also consider the relative abundances of the various PM's in the Earth's crust 

 

  • Silver 7.9×10-6%
  • Platinum 3.7×10-6%
  • Palladium 6.3×10-7%
  • Gold 3.1×10-7%
  • Rhodium 7.0×10-8% 
  • [There are others that are even more rare and incredibly underpriced, but I'm not telling here] ;) 

 

Platinum is not THAT rare it's just a bitch to get to (deep mines) 

The ironic part is that in the asteroids and meteors platinum is MUCH more common than silver or gold.   

Fri, 01/04/2013 - 17:05 | 3123767 knukles
knukles's picture

Silly, it's abiotic!
Sheeesh!

Fri, 01/04/2013 - 17:08 | 3123781 foxenburg
foxenburg's picture

 when you realize that nearly 260 tonnes of steel are used in U.S. manufacturing operations daily.

 

funny, you'd think it would be more than that.

Fri, 01/04/2013 - 19:11 | 3124107 Vendetta
Vendetta's picture

we don't make much anymore but fiat debt

Fri, 01/04/2013 - 18:11 | 3124013 zerozulu
zerozulu's picture

No, when SHTF you can make a trillion $US coin with the copper.

Fri, 01/04/2013 - 16:07 | 3123491 Irelevant
Irelevant's picture

We need the Fukushima enriched melted core TM uranium+PU coin. Not only to solve the US debt but solve the JP debt as well! We need the coin to be highly radioactive and be carried by the chairman of the FED in his pocket at all times, to keep it secure. When the chairman gets replaced, or expires, as in the case of the senile Greenspan, the coin stays with the new one!

Fri, 01/04/2013 - 17:46 | 3123929 TraderTimm
TraderTimm's picture

And everyone gives me a hard time about bitcoin. At least we're not looking to make a $1 TRILLION coin to solve debt problems.

I really hope they do it, please, devalue the hell out of the dollar. I dare them.

Fri, 01/04/2013 - 19:03 | 3124095 Payable on Death
Payable on Death's picture

I can't believe I have to do this...

Platinum bitchez!

Sat, 01/05/2013 - 00:35 | 3124660 H E D G E H O G
H E D G E H O G's picture

"sixteen tons, and whatya get,

  another day older and

  deeper in debt"   Tennessee Ernie Ford, singing an old coal mine hymn, "Sixteen Tons". Damn if that doesn't sound familiar...................

Fri, 01/04/2013 - 15:14 | 3123173 SheepRevolution
SheepRevolution's picture

Shit doesn't even fit on my computer screen...

Fri, 01/04/2013 - 15:17 | 3123196 IvyMike
IvyMike's picture

I have a screen stretcher. Well, it works with fences.

Fri, 01/04/2013 - 15:31 | 3123288 Dr. Richard Head
Dr. Richard Head's picture

You can market that along side my Bucket O' Steam.

Fri, 01/04/2013 - 15:15 | 3123180 walküre
walküre's picture

yeah, now we're talking

Fri, 01/04/2013 - 15:21 | 3123186 Aurora Ex Machina
Aurora Ex Machina's picture

Global GDP - approx $75 trillion.

Make 1 coin = $75 trillion.

That 1 coin = Global IMF currency.

Use a variant of BitCoin to mark-to-mark all currencies to that coin.

Phase out all other currencies to switch to the GIMF.

Each unit of currency is a share of a GIMF. Or a SOGIMF.

 

Economics - solved!

 

Then work on where you're getting the other 2 world's worth of commodities you're currently using from. People are asteroid hunting, I've heard.

Fri, 01/04/2013 - 15:19 | 3123188 FEDbuster
FEDbuster's picture

Maybe a platinum clad coin would be more in keeping with current monetary policy?

Wonder what would happen if you tried to buy a taco at Taco Bell with it?  Here is how they handle the $50 gold eagle:

http://www.youtube.com/watch?v=Ef0VG1WEP10

Fri, 01/04/2013 - 15:35 | 3123311 uncle_vito
uncle_vito's picture

She should have given him $49.01 back to him and kept it.   He should be thankful she gave it back.

Fri, 01/04/2013 - 16:00 | 3123466 FEDbuster
FEDbuster's picture

No spot in the drawer for it can't accept it for payment.  99% of clerks would have done the same thing.

Fri, 01/04/2013 - 20:51 | 3124321 Harbanger
Harbanger's picture

I just watched the video for the 1st time.  The video is only a year old and the coin was worth $1400 dollars.  Today the same coin is at least worth $250 dollars more, that's 250 more tacos, who said you can eat gold?

Fri, 01/04/2013 - 20:57 | 3124328 FEDbuster
FEDbuster's picture

Just think of all the tacos you could buy with the $1 trillion dollar platinum coin! 

Fri, 01/04/2013 - 15:46 | 3123190 FL_Conservative
FL_Conservative's picture

Tyler, the Treasury hasn't minted any coins since 1964 that had equivalent material value.  For what it's worth, they could use tungsten or cadmium and call it what they want, although I shouldn't give them any ideas.

Fri, 01/04/2013 - 16:45 | 3123672 HellFish
HellFish's picture

Actually no, I believe only Platimun coins are allowed to be minted at the Treasury's discretion.  Others need an act of Congress.  Saw that elsewhere.

Sat, 01/05/2013 - 13:02 | 3125248 KansasCrude
KansasCrude's picture

Actually the pre 1982 penny as well as the nickel have met the metal value equal to or greater than its intrinsic value threshold. 

Also anybody seeing Tulving is totally out of Pre 64 silver coin...OFF their offer sheet....first time I have ever seen that in my years of monitoring it.  Premiums to purchase positve,  Even Northwest Territorial Mint has positive premiums.....they usually lag on their offers.  To those always crying where is the shortage uh   HELLO!

Gold offerings getting skinny too if they didn't have eagles to offer they would be about out with the exception of Canadian and Aussie plus a few bars. 

http://www.tulving.com/goldbull.html

Fri, 01/04/2013 - 15:18 | 3123191 Dr. Engali
Dr. Engali's picture

"It also means the value of the paper US currency would have to go down by 1,100".

 

I wish it would hurry it's ass up. I look forward to paying off my mortgage with a silver Eagle.

Fri, 01/04/2013 - 15:20 | 3123212 walküre
walküre's picture

hey, at least it's out there and they're talking about it .. everyone knows that only a massive revaluation is able to right the ship

Fri, 01/04/2013 - 15:31 | 3123285 nope-1004
nope-1004's picture

Can one of y'all point me to a link on this original story?   I missed it and am totally confused by what all this trillion dollar coin talk is about.

Thx.

 

Fri, 01/04/2013 - 15:49 | 3123396 walküre
walküre's picture

I found this story on Spiegel.de in Germany this morning. If it made it to Spiegel, it's pretty much verified to be true.

http://www.spiegel.de/wirtschaft/soziales/schuldengrenze-eine-billion-do...

The comment section is funny. Germans calling the whole US ponzi a fiasco already. See, nobody believes the crap from DC anymore. Propaganda only works when it has credibility. The fate of the USSR was sealed when their propaganda efforts failed.

Fri, 01/04/2013 - 15:55 | 3123437 nope-1004
nope-1004's picture

Thanks.

Fri, 01/04/2013 - 16:03 | 3123475 ZerOhead
ZerOhead's picture

Nice catch.

All it takes is for about 5% of the population to figure out (not just 'know'... but understand and appreciate) the scam and it is all over in a giant stampede to the exits.

That time is drawing nearer each day...

Fri, 01/04/2013 - 17:08 | 3123779 Bunga Bunga
Bunga Bunga's picture

Jakob Augstein, "Der Spiegel" columnist and son of "Der Spiegel" founder Rudolf Augstein nominated No 9 of the world's worst anti-semites by the Wiesenthal Center.

http://www.jta.org/news/article/2012/12/28/3115561/muslim-brotherhood-to...

Fri, 01/04/2013 - 17:38 | 3123903 Dr. Sandi
Dr. Sandi's picture

Do they have a list of the world's best anti-semites too?

Sun, 01/06/2013 - 20:47 | 3128237 Tompooz
Tompooz's picture

"Do they have a list of the world's best anti-semites too?"

I found it here, sort of: http://www.masada2000.org/list-TUVWXYZ.html 

Fri, 01/04/2013 - 17:47 | 3123939 walküre
walküre's picture

Woof woof!

Fri, 01/04/2013 - 15:45 | 3123371 FL_Conservative
FL_Conservative's picture

You got that right, Doc.  That's been my plan too.

Fri, 01/04/2013 - 15:17 | 3123197 Dadburnitpa
Dadburnitpa's picture

The coin should have Snookie on one side and Eddie Murphy's impersonation of Buckwheat on the other.  That would make it a collectable.

Fri, 01/04/2013 - 15:21 | 3123230 FEDbuster
FEDbuster's picture

No, Obama's mug should be on the front with a big, shit eating grin.  The back should just have the words, "Hope, Change and Forward!"

Fri, 01/04/2013 - 16:11 | 3123400 Doug Eberhardt
Doug Eberhardt's picture

I put Obama's mug on this currency...accomplishes the same thing as the Platinum $1 Trillion coin...

 

www.barackazillion.com "The Only Currency You Ever Need" "As Good As Gold" It even has a picture of Fort Knox on it! (and the only one with a smiling President on it!)

 

I do it to mock of course... and unlike the Liberty Coin guy, it's legal to print your own money. I had www.mittazillion.com just in case...

Fri, 01/04/2013 - 21:17 | 3124355 lakecity55
lakecity55's picture

I bet you could pass them in the hood.

Fri, 01/04/2013 - 15:48 | 3123389 azzhatter
azzhatter's picture

Just put Barry and Michelle on it. Same thing

Fri, 01/04/2013 - 15:58 | 3123457 BullsNBeers
BullsNBeers's picture

Thanks. I just had to explain to 4 of my coworkers why I just started cracking up at my desk.

Cheers.

Fri, 01/04/2013 - 15:17 | 3123199 Bazinga
Bazinga's picture

We’ll know our disinformation program is complete when everything the US public believes is false. 
–William J. Casey, 1981 – Director of Central Intelligence from 1981 to 1987

Hopefully this platinum coin "idea" won't pick up too much steam.

Fri, 01/04/2013 - 15:27 | 3123256 NotApplicable
NotApplicable's picture

It will be interesting to see if my wife mentions it as it filters through her idiot friends facebook pages. Last month I got to hear her opinion on the "fiscal cliff."

Well, until I started yelling, "Stop that! It's all fake!" over the top of her conventional ignorance.

Sadly, many of our friends read HuffPo and Slate, so I know it's only a matter of time.

Fri, 01/04/2013 - 18:33 | 3124062 laboratorymike
laboratorymike's picture

HuffPo is likely one of the Internet's easiest places to troll.

1) Go to HuffPo

2) Include the text "Tea Party" in a comment.

3) ?????????

4) FIREWORKS!

 

In all seriousness, HuffPo users are an interesting creature to study. I'd characterize them as people who haven't figured out that the old "government vs. big business" and "Democrat vs. Republican" lines are a false dichotomy. They know "something's wrong," but haven't figured out what it is, so the kneejerk response is to blame The Other PartyTM.

Fri, 01/04/2013 - 21:13 | 3124350 lakecity55
lakecity55's picture

Yes, (sigh), my wife, a liberal school marm, just brought this up.

She voted for ophone, so of course she thought it was a good idea.

She hid this knowledge from me before we got hitched.

Fri, 01/04/2013 - 15:20 | 3123200 AldoHux_IV
AldoHux_IV's picture

Which, by the way, is precisely what all those who wish for the Fed to continue funding America's unprecedented spending binge, which can never be satisfied by taxes alone, are hoping for.

There in lies the crux of the argument for this and all other stupid ideas that circle about-- how is the trillion dollar coin any different from what the fed is doing?  It's just replacing one illusion with another.

Edit: Moreover, how is this any different than modern financial engineering and all the leverage in the system?

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