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What Is "Dysfunctional" Here?

Tyler Durden's picture




 

From Bill Buckler, author of The Privatter

What Is "Dysfunctional" Here?

In the eyes of those who run financial markets - not just in the US but all over the world - a “dysfunctional” government is one which puts any impediments whatsoever on unlimited credit creation. Given the $US hundreds of TRILLIONS of “derivatives” extant, any such “limits” or even the thought that there ARE any limits is dangerous in the extreme. These same “markets” get awfully nervous when there is any discussion about “limits” to the issuance of US Treasury debt because that same debt is the ONLY underpinning for the US Dollar which is in turn the ONLY underpinning for the global financial system.

To understand the ludicrous nature of what now passes for “fiscal management” in the US or anywhere else, consider an example. At present, China owns about $US 1.2 TRILLION “worth” of US Treasury debt paper. Imagine if you will the reaction from the Chinese government if Mr Obama ordered his Treasury to mint a platinum coin weighing (let’s be generous) 100 troy ounces with a denomination of $US 1.2 TRILLION. Having received this beautiful, bright and shiny new coin. Mr Obama then stuffs it in his briefcase, jumps aboard Air Force One and directs the pilot to head for Beijing. Upon landing, Mr Obama drives to the Great Hall of the People. He then requests and is of course granted a meeting with the Chinese Premier. Mr Obama then plunks his briefcase down on the Premier’s desk, extracts the coin, hands it to the Premier and declaims with a huge smile: “There you go - we’re even!” “I’m off to Tokyo now. I’ve got another one just like this one for them.”

Nobody could take this seriously, except an almost terminally dysfunctional government. Sadly, that’s the kind of thing that the markets are counting on and have been counting on for years.

 

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Sun, 01/06/2013 - 11:23 | 3126926 JeremyWS
JeremyWS's picture

We're all fucked.

Sun, 01/06/2013 - 11:29 | 3126935 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Propaganda aimed at US citizens at its best. No, Chinese are not that dumb. Time to pay the fiddler.

Sun, 01/06/2013 - 11:32 | 3126940 francis_sawyer
francis_sawyer's picture

PRATINUM!... We no need your stinkin' Pratinum!...

Sun, 01/06/2013 - 11:53 | 3126974 negative rates
negative rates's picture

Didn't Hillary and Timmy just do that? Reassured them of the FULL faith and credit of the U.S.G. That would have been good enough if we were NOT the fall guy.

Sun, 01/06/2013 - 12:20 | 3127010 Landotfree
Landotfree's picture

I have no idea as to the point of that article.  There can be no limit placed on the creation of credit, as that can be done by contract.   The amount of the US credit system what we know as the federal reserve system must be allowed to expand as what would you service the prior credit with?   

A cap on the expansion of the system would collapse the system.

Sun, 01/06/2013 - 12:49 | 3127078 kill switch
kill switch's picture

A cap on the expansion of the system would collapse the system

 

Now that would be refreshing!!

 

The kill switch

Sun, 01/06/2013 - 13:27 | 3127148 toady
toady's picture

More people need to understand this simple idea.

We are completely debt free, and we have secured a debt free existence for our children. We will never need to purchase a new home or car or anything else on credit. We have become fanatical about it. If we can't pay outright the purchase is not made.

If 20 or 30% of the West could do this the financial-corporate complex would collapse.

Sun, 01/06/2013 - 13:33 | 3127157 yogy999
yogy999's picture

Bingo!

Sun, 01/06/2013 - 14:14 | 3127240 sunaJ
sunaJ's picture

When I first heard of the trillion dollar platinum coin meme, I thought it was a joke.  It is a joke, but it keeps coming back as something viable.  Since the assignment of dollar value is arbitrary, I say we should make it a 2oz coin (or 200oz), worth $2 trillion.  That way, the Chinese can figure out how they are going to pay us back $1 trillion that they owe us

 

If you cannot pay, China, we will happily accept more of your cheap goods as collateral.  It's a pleasure doing business.

Sun, 01/06/2013 - 16:51 | 3127626 RockyRacoon
RockyRacoon's picture

They will give us change in large iron coinage.  I hear they have a lot of that stockpiled.

Why not just save the wear and tear on the coin presses and exchange IOUs written on the back of the Constitution instead.  Give that Presidential auto-pen a good workout.

Sun, 01/06/2013 - 17:00 | 3127649 akak
akak's picture

I'd settle for one of those Yap Island giant stone "coins" --- and what a cool lawn ornament that would be!

Sun, 01/06/2013 - 17:37 | 3127724 RockyRacoon
Sun, 01/06/2013 - 20:12 | 3128157 boogerbently
boogerbently's picture

HEY,

It's worth a $Trillion if I SAY it's worth a $Trillion.

Sun, 01/06/2013 - 13:47 | 3127182 SafelyGraze
SafelyGraze's picture

"Nobody could take this seriously, except an almost terminally dysfunctional government."

on the other hand, everybody could take it seriously if the treasury issued 1 or 16 or 80 or 400 trillion in fiat coins for deposit at the fed, then drew on that "account" and remitted (electronically) them as "actual" "dollars"

hey look! the treasury is $600T in the black!

Sun, 01/06/2013 - 20:19 | 3128178 boogerbently
boogerbently's picture

Genius,

Want Geithners job?

Sun, 01/06/2013 - 11:32 | 3126941 GetZeeGold
GetZeeGold's picture

 

 

No, Chinese are not that dumb.

 

Well crap.....that takes a lot of options off the table.

Sun, 01/06/2013 - 11:51 | 3126965 DoChenRollingBearing
DoChenRollingBearing's picture

No, they are not.  The Chinese have a problem, what can they get with their depreciating dollar assets?  The answer of course is hard goods.  Gold.  Mines.  Ag land in LatAm and Africa.  Oil companies.

(Actually that is not a bad idea for each of us, buying gold...)

Complex societies with lots of debt and opaque undercurrents are almost exactly the definition of a fragile system.  N. N. Taleb writes in his new book Antifragile that you cannot predict the furture, but you can assess risks to most systems, whether fragile (bad), robust (OK) or antifragile (systems that get stronger under stress, best).

Explore with me some further ideas of his (or BTFB! and come exploring...):

http://tinyurl.com/9wclt2a

Sun, 01/06/2013 - 12:12 | 3127004 Bicycle Repairman
Bicycle Repairman's picture

Dollars cannot be left with legitimate nuclear powers.  The ramifications are too serious.  Once the dollars are in the hands of more 'pliable' regimes the process of devaluation can proceed in earnest.  Then the countries that get stiffed can discuss things with whoever bought items that are located in the stiffed countries.

Sun, 01/06/2013 - 14:36 | 3127298 negative rates
negative rates's picture

You actually sound like a federal, a booker T Federal at that!

Sun, 01/06/2013 - 12:14 | 3127006 Jam Akin
Jam Akin's picture

You are right DoChen.  The main interest of the Chinese leadership of course is to retain power.  They need to manage the revolution of rising expectations of their 900 million or so poorer citizens.  And they are executing their plan reasonably well.  Get as much real wealth/value as possible out of the USD hoard that they got for free by printing up Yuan while trying to reduce transaction costs/secure the benefits of a reserve currency position globally for that which they are printing up.  It is all very logical.  

Sun, 01/06/2013 - 14:14 | 3127244 Jam Akin
Jam Akin's picture

Incidentally, one thing they will be needing more of in China is silver.  Not widely known in the US but the authorities in China are planning a nationwide network of grid tied large scale PV generating plants in order to fill the capacity of local solar panel manufacturers who were subjected to much higher US import duties last year.

http://www.mercurynews.com/business/ci_21948288/trade-panel-upholds-u-s-...

 

Sun, 01/06/2013 - 12:23 | 3127023 Winston Churchill
Winston Churchill's picture

So dumb that they bought those UST's in the first place.

Fool me once....

I don't believe they even hold them anymore.Purely on paper maybe.

Either a secret deal with the FedRes or pledged as collateral with western banks

to buy barbarous relics.

Go.China.

Sun, 01/06/2013 - 14:29 | 3127281 B-rock
B-rock's picture

They bought them so they can sell them some day and blow up the US with a bond bomb.  $1.2T is pretty cheap for such an effective weapon.  The US walked right into the trap.

Sun, 01/06/2013 - 20:17 | 3128174 boogerbently
boogerbently's picture

Now you're getting close.

We have a history of making citizens pay for all political and corporate indiscretions.

We have a history of confiscating gold.

Keep the price of gold low enough and the reason for buying it high enough.

Confiscate gold, THEN let the price run up.

Then pay our debts with gold confiscated from the citizenry.

Sun, 01/06/2013 - 11:34 | 3126946 Clint Liquor
Clint Liquor's picture

Time to pay the fiddler.

Pay with what? Fiat created from thin air? The Platinum coin would be a better deal.

Sun, 01/06/2013 - 11:55 | 3126978 Silver Garbage Man
Silver Garbage Man's picture

The sad thing is that coin would have more intrinsic value than the treasuries .

Sun, 01/06/2013 - 12:10 | 3127002 cossack55
cossack55's picture

I'm pretty certain the USG will prove once again how dysfunctional it really is in the next 60 days.  One man's dysfunction is another man's bonus.

Sun, 01/06/2013 - 12:47 | 3127072 CH1
CH1's picture

that coin would have more intrinsic value than the treasuries

Yes, but for now there are still bigger suckers, who will take Treasuries for things like wheat and metal and cars.

If the Chinese have any sense, they are trading with the suckers right now.

Sun, 01/06/2013 - 11:47 | 3126963 smlbizman
smlbizman's picture

i hope the chinese read the hedge.....not that im enamored with the chinese...but gentleman and ladies what we have going now has got to be stopped...it is inhaling the entire planet,... so once we end this we can get back to a better sanity level...than we can fuck that up...

Sun, 01/06/2013 - 11:59 | 3126989 Antifederalist
Antifederalist's picture

What is this "we" white man.   Some of us own gold and silver.  teh, heh

Sun, 01/06/2013 - 12:07 | 3126996 TWSceptic
TWSceptic's picture

There's nothing anyone can do about it, the crash will happen. But fucked? No. Those who are aware can profit from all this. I honestly believe that there is no way to deal with this mess, it has already past a tipping point. Now it just has to get much worse. Only then people will come to their senses. It has been like that throughout human history, and since human behavior hasn't really changed, it will all happen again. Only this time it will be much more severe.

Sun, 01/06/2013 - 12:34 | 3127047 Eireann go Brach
Eireann go Brach's picture

After handing over the coin, Hopefully the Chinese president will grab a box of Wendy's chicken wings and beat the crap out of Obama with them!

Sun, 01/06/2013 - 13:46 | 3127179 slaughterer
slaughterer's picture

If the USA were creditworthy, this "$1T platinum coin" idea would be unnecessary.   When will Treasury prices respond to these signs of desperation?  The "full faith and credit" of the US Government, accepted by most buyers of Treasuries as an iron-clad guarantee, will not stir much more enuthusiasm for Treasury cram-down paper if politicians and pundits in the USA are attracted by the apparent "promise" of this market-mindless myth of the $1T platinum coin.  

Sun, 01/06/2013 - 14:28 | 3127278 slaughterer
slaughterer's picture

Countries that are able to defer the finanvcial day of reckoning far into the future are not constrained by reality.  Nor are the markets surrounding them.  (Zimbabwe lesson #1).  

Sun, 01/06/2013 - 14:45 | 3127315 ramacers
ramacers's picture

don't have to be - entirely. don't get mad, get ----. start honing the blade for the smug, elitetist political master classers. been done before, relatively sucessfully.

Sun, 01/06/2013 - 11:27 | 3126930 deepsouthdoug
deepsouthdoug's picture

Money for nothing and Air Force 1 is free!

Sun, 01/06/2013 - 11:34 | 3126948 GetZeeGold
GetZeeGold's picture

 

 

Better tone it down.....you'd look like a mack daddy hitching a ride on that thing in this economy.

Sun, 01/06/2013 - 11:59 | 3126987 Bill the Cat
Bill the Cat's picture

Pftwbt!

Sun, 01/06/2013 - 16:55 | 3127635 RockyRacoon
RockyRacoon's picture

My sentiments, exactly.

Sun, 01/06/2013 - 16:59 | 3127645 akak
akak's picture

Ack ack!

Sun, 01/06/2013 - 11:27 | 3126931 DeadFred
DeadFred's picture

Copper is cheaper but you should be gracious and put really nice engraving on the coin.

Sun, 01/06/2013 - 11:28 | 3126932 Bullwinkle Moose
Bullwinkle Moose's picture

Pretty much sums it up

Sun, 01/06/2013 - 11:29 | 3126936 williambanzai7
williambanzai7's picture

I believe the Japanese would prefer a tuna.

Sun, 01/06/2013 - 11:31 | 3126938 Bullwinkle Moose
Bullwinkle Moose's picture

One that glows in the dark?

Sun, 01/06/2013 - 14:02 | 3127219 Jam Akin
Jam Akin's picture

I've seen that on the news somewhere.  But do they have a big enough coola'?

Sun, 01/06/2013 - 11:35 | 3126949 nmewn
nmewn's picture

Keep the Change Wen!!!

Sun, 01/06/2013 - 11:42 | 3126953 lolmao500
lolmao500's picture

Well debt has been the only engine of economic grow since the 80s. Of course people are scared of it ending... they've known only debt for their entire life.

Sun, 01/06/2013 - 11:43 | 3126955 Bernank Sheeple
Bernank Sheeple's picture

The Chinese Primier, would say no thank you, please pay me in $100's. You can take that coin and shove it up your a**.  

Sun, 01/06/2013 - 11:46 | 3126961 Clint Liquor
Clint Liquor's picture

Where do think the 100's come from?

Sun, 01/06/2013 - 11:59 | 3126990 unrulian
unrulian's picture

if they could pay in 100's it would be bullish for the baltic

Sun, 01/06/2013 - 11:44 | 3126956 agent default
agent default's picture

The moment they announce this coin is about to be minted for real, expect 1000 dollar gallon gas at the pump, 400 dollars for a loaf of bread, etc, etc.  This coin would be an admission that the US has defaulted on its currency.

Sun, 01/06/2013 - 12:54 | 3126975 Antifederalist
Antifederalist's picture

You give the world too much credit (pun intended).  The sheeple won't get it.

I subscribe to the Privateer. (highly recommended, Bill Buckler is a genius).  If you follow thru with the rest of the logic outlined by Buckler, they will do it, swear to never do it again, and use it as a mechanism to eliminate the debt ceiling forever.  They have already floated the "no debt ceiling" idea and this will be the way that Oblama uses the system to force the Republicans into the no debt ceiling box.  Brilliant.

Interesting theory.  Watch, they will find a way to eliminate the debt ceiling.  It is annoying to them.

 

Sun, 01/06/2013 - 13:22 | 3127137 Beam Me Up Scotty
Beam Me Up Scotty's picture

"they will do it, swear to never do it again"

 

Thats good humor, never do it again.  The truth is, there is never enough spending for these people.  They have infinite spending desires.  As soon as they can get a work around to the debt ceiling, spending will explode and so will inflation.

I mean, why stop at one trillion dollar coin?  Why not mint enought to fund the government so it could eliminate all taxation?  Oh, thats right, taxation is nothing more than a conduit of control.  But think about how bullish that would be for the economy if people could spend all of the taxes they pay to the governent on Ishit?    They will mint more coins the second they have another wet dream spending project that they want to fund.

Totally inflationary.

Sun, 01/06/2013 - 16:58 | 3127644 RockyRacoon
RockyRacoon's picture

I agree... as a subscriber to the Privateer since the late 1990s.  Ole Bill has helped me keep the PM faith in times of trouble and turmoil.  It has gotten rough but I've managed to hang on the the metals.

FYI: I'll be going out later today in my newly repaired boat with all my holdings.  Wish me luck.

Sun, 01/06/2013 - 17:46 | 3127742 DoChenRollingBearing
DoChenRollingBearing's picture

I hope I did not catch you too late Rocky, don't forget to bring your navigation charts with you.

Sun, 01/06/2013 - 18:08 | 3127796 akak
akak's picture

I think it's the standing up in the canoe while showing off one's PMs to those on shore that invariably is the problem.

Mon, 01/07/2013 - 00:22 | 3128710 RockyRacoon
RockyRacoon's picture

Redneck's last words:  "Hey, ya'll, watch this!"

Sun, 01/06/2013 - 12:02 | 3126993 unrulian
unrulian's picture

Nay....it should be..i'm sure we'll see the SM rise on the news, every time they raise the debt ceiling they default...nothing to see...move along

Sun, 01/06/2013 - 11:50 | 3126970 Sean7k
Sean7k's picture

And yet, not a single MSM pundit has considered this idea. They just saw the value in the extension of the debt ceiling. It is not ridiculous in the latter case and let's not even consider the former. 

When the first idea into their heads should have been this very consequence. It was the first one into mine. Which makes it pretty pedestrian. 

We are living in a world of fantasy rule and infinitely flexible rules. There is no rationalization too extreme, no responsibility so slight, for the Elite to impose and the People to suffer. 

Want to be "rich"? you have to play along. 

Want to be "wealthy"? you have to find the creases and hide within them. 

Want to be "poor"? Just keep on believing: in your State, your leaders, their propaganda and the assignation of negative value you both place upon your lives and the ones you love.

 

Sun, 01/06/2013 - 11:52 | 3126971 Silver Garbage Man
Silver Garbage Man's picture

Gold and Silver. Keep it Safe and Simple.When this ponzi blows it will change everything.

Sun, 01/06/2013 - 11:53 | 3126972 Peter Pan
Peter Pan's picture

Dear China,

Please take the 100oz platinum coin and be grateful because if and when the US dollar goes belly up, that coin will be worth a lot more than all the crappy paper you have been buying from the USA.

And don't forget all the jobs, capital and factories the USA exported to your shores as well in exchange for those crappy dollars you used to lend back to her.

Peter Pan

P.S. By the way, the briefcase Mr Obama is carrying is made in China.

 

 

Sun, 01/06/2013 - 11:56 | 3126982 Selah
Selah's picture

This will fix everything:

 

http://www.govtrack.us/congress/bills/113/hjres15

 

 

 

Sun, 01/06/2013 - 12:12 | 3127003 Antifederalist
Antifederalist's picture

Wow.  King Oblama and Queen Michele.  That is scary.

Sun, 01/06/2013 - 12:22 | 3127015 Monedas
Monedas's picture

No one should be allowed to work for the government for more than 8 years .... and only one employee per nuclear family .... stop the nepotistic, gov suck family dynasties .... at least expose them .... FOIA ?  Hahahahahahahahaha !   

Sun, 01/06/2013 - 12:52 | 3127079 magpie
magpie's picture

Thanks for the 2016 campaign slogan...Eight more years -for FDR 2 / the Obama/Obama ticket.

Sun, 01/06/2013 - 12:34 | 3127048 Monedas
Monedas's picture

No one should be allowed to work for the government for more than 8 years .... and only one employee per nuclear family .... stop the nepotistic, gov suck family dynasties .... at least expose them .... FOIA ?  Hahahahahahahahaha !    Rake the muck at the bottom of socialism's cesspool .... including public safety employees !

Sun, 01/06/2013 - 12:09 | 3127000 Monedas
Monedas's picture

Colloidal silver suppositories .... if not now .... when ?   "Holy raging rectums !".... Batman

Sun, 01/06/2013 - 12:22 | 3127014 Fix It Again Timmy
Fix It Again Timmy's picture

Just how are we dealing with this, because....

"The past, far from disappearing or lying down and being quiet, has an embarassing and persistent way of returning and haunting us unless it has in fact been dealt with adequately." - Desmond Tutu

Sun, 01/06/2013 - 12:29 | 3127022 KingTut
KingTut's picture

Unbelievable!  Is the economic intelligence of the average citizen really so stunted they can believe this solves anything?  I welcome the entertainment value, and the it is great fodder for jokes, but are we serious here?

I wrote this before, but coins are useful money because the metal has intrinsic value. Coins usually start out having more-or-less the same face value as metalic value.  So even if the government that mints it is untrustworthy, it doesn't matter because the coin's value travels with it. A coin cannot default even if the government does.  Heck, even the copper in a penny is worth more than 1 cent. 

Paper money, on the other hand, has essentially no intrinsic value, and takes its value from the fancy scroll work and numbers printed on it.  It has no intrinsic value, its value is purely symbolic.  It is an implicit promise to "make good on the face value, in some unspecified way, at some unspecified time in the future".  It is a promise that depends on your trust in the entity that issued it.  A dollar bill carries the "full faith and credit of the United States of America", which is what they mean.  And its value derrives in part from its scarcity; the government has to be trusted not to print too many of them.

But notice how difficult it is for me to even diescribe what it is.  Where is the value? It is totally symbolic and abstract.  What is not abstract is that when you go to the store, they are happy to exchange your paper money for food.  So you accept the whole premise.  However, the value seemed much more real when you could exchange $35 dollars for an ounce of gold, even if you never did.

A $1 trillion coin that has something like its intrinsic value would be about 20,000 tons of Platinum (give or take).  Think half a Titanic here.  That's alittle cumbersome even for Barack! Since we have only mined about 10,000 tons in all of history, that is totally impossible.  A 100 oz. Platinum coin with a face value of $1 trillion is much more like paper money than a coin.  Again, its value is purely symbolic, an abstract promise.

What's funny is this is exactly what we do already, only we call them treasury bills.  When we come up short buying all those BMW's from Germany, we just give them little peices of paper that "promise" to pay them back.  Of course, they get paid back in "dollars" which are just another piece of paper with a different implied promise.  When we don't have enough of them we just print more.  The actual process requires several steps, but the end result is the same.  So this idiotic $1 tirllion coin would just be a fancy treasury bill, with no coupon and no maturity date.  Its value is just conjured up out of thin air, it's just another promise of 'repayment' in the future.

If the Germans, Japanese and Chinese are smart, they'll just take all those dollars and buy gold or platinum with it.  Then they can make their own $1 trillion coins. 

Sun, 01/06/2013 - 12:45 | 3127070 Monedas
Monedas's picture

Any private party or gov can issue any form of specie .... Pt, Pd, Au, Ag, Cu. Kryptonite, Tungsten, etc. .... preferably in decimal fractions and known purities .... and no fixed values of or between the metals .... period .... world money is here already .... it's all around us .... for the using .... with a little freedom !

Sun, 01/06/2013 - 14:41 | 3127307 BooMushroom
BooMushroom's picture

Not enough room for graft.

Sun, 01/06/2013 - 18:37 | 3127867 ShrNfr
ShrNfr's picture

Not really.

Article 1,

Section 10,

1:  No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Sun, 01/06/2013 - 17:19 | 3127678 RockyRacoon
RockyRacoon's picture

The current American Silver Eagle has a face value of $1.  The reason is to prevent it from circulating.  Its face value must be lower than its intrinsic (market) value of metal.   The silver coins disappeared from circulation FAST when they introduced clad coinage in 1965.  The nickel is on the way since its value (planchets + cost to produce + cost to distribute) exceeds its face value.  Stock up.  The U. S. has no economical way to recall and recover the metal from its circulating coinage (unlike Canada did).  The law against melting nickels and cents will be overlooked after the introduction of the "new" nickel, and the cent if it survives at all.   Why?  The gov't would love it if the older coinage faded away quietly.  Gresham's Law and all that.  There is a method to all this madness -- just ask the Romans how that worked for them.  Iron coins anyone?  The problem is currency debasement, not anything else.  All the rest is smoke and mirrors.

Sun, 01/06/2013 - 13:05 | 3127036 michael_engineer
michael_engineer's picture

"These same “markets” get awfully nervous when there is any discussion about “limits” to the issuance of US Treasury debt because that same debt is the ONLY underpinning for the US Dollar which is in turn the ONLY underpinning for the global financial system."

Isn't an alternative to debt creation and QE a fairer and broader taxation model? Maybe the whole point of QE and similar "bailouts" has been to avoid increasing taxes for the 1 percenters and to avoid their having to take losses on bad investments. Has QE and bailouts shifted those losses and tax burdens onto the middle and lower classes?

It does seem like a lot of things have been designed to shift the tax burden, and shift wealth while hiding the long term effects. Remember the trickle down sell job we got? In reality wasn't that a trickle up and trickle out of the country in disguise? Please notice the embedded use of the word "Trick" (someone got big laughs on that I'm sure). A lot of money and investment, jobs and factories were offshored as a result, weren't they?

Sun, 01/06/2013 - 17:22 | 3127686 RockyRacoon
RockyRacoon's picture

Yes, yes, and yes.  Good questions.

Just consider higher taxes on the so-called wealthy as claw-backs.  They do it for high-income earners when they fail.  Why not those who skimmed the most from the Ponzi?

Sun, 01/06/2013 - 12:30 | 3127037 sudzee
sudzee's picture

If the US creates a trillion dollar coin I would expect all countries to do the same. Fiat won't devalue against fiat but all soverign debts could be retired. Soverign reset nirvana.

Sun, 01/06/2013 - 14:59 | 3127337 BooMushroom
BooMushroom's picture

Each country could build a monument with their received coins as a reminder of the foolishness of buying foreign debt paper.

Sun, 01/06/2013 - 12:35 | 3127051 freedogger
freedogger's picture

Cut the number of overseas military bases. Trade and fiscal deficits go down, dollar saved, remaining deficitscheaper to finance. Problem ducking solved! (Why the puck doesn't auto complete with with curse words?)

Sun, 01/06/2013 - 13:06 | 3127111 ebworthen
ebworthen's picture

It's a game.

The Chinese bought our debt because we were happy to hand over our productive capacity and employment of our people for cheap crap they made with slave labor.

It's a war where the leaders of both sides - colluding with their captains of industry - enslave their citizens.

Sun, 01/06/2013 - 13:14 | 3127114 Benjamin Glutton
Benjamin Glutton's picture

Why not just deposit Saddam Hussiens' 1 Trillion dollar corpse at the Fed...

 

my personal preference would be a DOD deposit of plutonium.

Sun, 01/06/2013 - 13:23 | 3127142 q99x2
q99x2's picture

Tell China to go bang some pans. The banksters stole their money. Let them hunt them down and arrest them. I'm going fishing.

Sun, 01/06/2013 - 13:24 | 3127143 Nid
Nid's picture

hands it to the Premier and declaims with a huge smile: “There you go - we’re even!”

At which time the Premier reaches into his desk, pulls out a nearly identical coin and says, "solly Bally, I've alleady got one...it's a velly nice."

Sun, 01/06/2013 - 13:28 | 3127147 magpie
magpie's picture

Bennie B.: Obama is gonna get me a platinum pog

http://www.youtube.com/watch?v=Lr_kkdmLf7I

Sun, 01/06/2013 - 14:22 | 3127266 sansnobel
sansnobel's picture

Uhm, excuse me.....Platinum is not "money"  debt is you fucking Treasury retard.   The fucking Chinks can continue to take our Jew confetti or don't.  It's our debt/currency, but it's your fucking problem muchacos.  Take it or leave it. 

Sun, 01/06/2013 - 14:56 | 3127332 Jam Akin
Jam Akin's picture

There is, of course, the little bitty problem that our "Jew Confetti" has value in international trade mainly through its position as global reserve currency which your so-called "Fucking Chinks" are doing their level best to interfere with by substituting their "People's Money" all around the world.  "Leave it" won't feel very good when it finally happens someday.

Sun, 01/06/2013 - 16:30 | 3127581 sansnobel
sansnobel's picture

Well unless The "Chinks" have a Blue Water Navy I don't know about that can police the Sea lanes and project power onto the Sand people to keep the price of Oil stable enough to engage in trade among nations it's gonna be a while before that day comes I guess.  One aircraft carrier does not constitute a Blue water Navy.

Sun, 01/06/2013 - 17:26 | 3127696 RockyRacoon
RockyRacoon's picture

I'll infer that your only hammer is military might, and that all the nails out there are folk who might dis the dollar.

Best of luck with that scenario.

Sun, 01/06/2013 - 19:13 | 3127963 sansnobel
sansnobel's picture

Ofcourse, what do you think the last 70 years of limited warfare have been about?

Sun, 01/06/2013 - 19:33 | 3128024 Jam Akin
Jam Akin's picture

Trying to enforce will by means of arms against the unwilling has worked out really well for the US over the last 50 years or so hasn't it?   There is much less US public will behind a long term COIN project than there is in favor banning "assault weapons" at home these days.  That's the land warfare reality.

Besides all it will take to disrupt the balance of your thesis is enough warheads that reach their targets in a naval chokepoint like, say, vicinity of Hormuz.  Do you think those who oppose the continued position of "Jew Confetti" haven't been working on making this threat a reality?

When the "Jew Confetti" loses its position (and that seems to be the trend in play) there goes the capability for power projection.  Seems to me it may not take that long to play out at all.

Mon, 01/07/2013 - 00:43 | 3128751 sansnobel
sansnobel's picture

You know what douchebag? I hope your philosohy ain't apart of your investment thesis. Cause you are gonna go broke  trying to short the USD.  If you have not already.  There is no preiminent contender for world dominance so good luck like I said. 

Mon, 01/07/2013 - 00:51 | 3128767 Jam Akin
Jam Akin's picture

You are right in one respect.   I don't do well at foreign currency investment.   So I stay away from it except for some prudent diversification in these "interesting times".   You should stay away from the geopolitics, bro - it'll just make your brane hurt "preiminently".  

Mon, 01/07/2013 - 01:23 | 3128807 sansnobel
sansnobel's picture

Make my Brain hurt preiminently huh?  What makes you think I have no knowledge of world history there ?  I think I could hang tough with just about anybody out there when it comes to Geopolitics.  I have no agenda so that makes me even more potent.  Your "interesting times" are pretty much every fucking decade amigo.  Until WW3 or the Return of Christ it will be" interesting times". Spare me and everybody the fucking Drama and let me know whats so interesting about our times?  Other than the take down of Amerika by the Communists.

Mon, 01/07/2013 - 05:35 | 3128963 Jam Akin
Jam Akin's picture

Drama?  "Fucking Chinks"..."Jew Confetti"..."Amerika's being taken down by the Commies"...what I learned here is that Archie Bunker is alive and well!  And here all this time Arch, I thought you was like, er, onna dem dere fictional characters, see.

Mon, 01/07/2013 - 00:46 | 3128757 sansnobel
sansnobel's picture

the people of the world are not going to give up the Jew confetti system.  It gives to much prosperity in every nation that has willing loyal slaves willing to use it as currency. Which is pretty much every nation on Earth.  So good luck with your conversion plans.  Hope that works out well for you.

Sun, 01/06/2013 - 18:40 | 3127881 samsara
samsara's picture

Er, That's what Bass meant when he remarked "You know how this ends right? This ends in war. And not just little ones".

Watch the chess pieces on the board. Mind their movement.

Sun, 01/06/2013 - 14:38 | 3127300 Klazy Plick
Klazy Plick's picture

What happens when you get too much Monopoly (TM) money?  You put another hotel on park place.  More players, bigger board, more monopoly money.

Sun, 01/06/2013 - 17:39 | 3127731 WmMcK
WmMcK's picture

You can have more than 1 hotel? Damn, I've been play by the (original/obsolete) rules!

Sun, 01/06/2013 - 16:48 | 3127620 Quinvarius
Quinvarius's picture

I still don't see the difference bewteen the trillion dollar coin printing a trillion in paper.  We are going to print our way out of this.

Sun, 01/06/2013 - 17:27 | 3127701 RockyRacoon
RockyRacoon's picture

It's all about appearances:  One must look good at all costs, while going broke.  Sure, the sleeves may be a bit tattered and the cuffs somewhat worn, but we still have our pride!

Sun, 01/06/2013 - 22:14 | 3128446 Miles Kendig
Miles Kendig's picture

Pride, in the quality and craftsmanship of the chromed nails tacking down the windows.

Good to see ya Rocky!

Mon, 01/07/2013 - 01:21 | 3128805 RockyRacoon
RockyRacoon's picture

More like those going into our coffins.

Mon, 01/07/2013 - 02:35 | 3128868 Miles Kendig
Miles Kendig's picture

It amounts to the same thing, the difference being time horizons

- Rose Madder

Sun, 01/06/2013 - 18:33 | 3127850 samsara
samsara's picture

The coin has residual value.

Sun, 01/06/2013 - 21:37 | 3128353 dunce
dunce's picture

The continuing three stooges series that is our government, obama, Bernanke and Giethener in the leading roles.

Sun, 01/06/2013 - 22:04 | 3128417 Miles Kendig
Miles Kendig's picture

As achieving .. And It's Gone

http://www.youtube.com/watch?v=4TlPo0yCSa4

becomes serious conversation.  Talk about a family that has lost it all and now needs to clip the coin .. to the tune of 100oz = 1Trillion.  Mark your books!

Mon, 01/07/2013 - 02:06 | 3128841 Walt D.
Walt D.'s picture

" a “dysfunctional” government is one which puts any impediments whatsoever on unlimited credit creation."

a dysfunctional government is one which bails out GSE's and TBTF Banks who engage in 60-1 leveraged transactions. 

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