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Forget The $1 Trillion Platinum Coin - Here's The $10 Trillion Stone Coin

Tyler Durden's picture




 

Suibmitted by Charles Hugh-Smith of OfTwoMinds blog,

The point I'm making with the $10 trillion stone coin is that if money is a social contrivance, then it should be distributed to those creating goods and services.

 
You've probably heard of the $1 trillion platinum coin proposal: the basic idea is the U.S. Mint issues a $1 trillion platinum coin, and returns the difference between the cost of minting the coin (trivial) and the face value attributed to the coin ($1 trillion) to the United States Treasury General Fund.
 
This difference is known as seigniorage. The federal government could then spend the $1 trillion without having to borrow the money by selling Treasury bonds--the usual mechanism for funding federal deficit spending.
 
The idea was originally proposed as a way of avoiding more federal borrowing:rather than borrow another $1 trillion to fund federal spending, the Treasury would be handed $1 trillion in freshly created cash as seigniorage proceeds from the $1 trillion coin.
 
Is the idea legal? Some scholars say yes, others are doubtful.
 
The point of the $1 trillion platinum coin is to create money out of nothing and do so outside the Federal Reserve, which creates money out of nothing but balances that debit by buying Treasury bonds, which are booked as an asset.
 
Some observers have suggested minting a $1 trillion platinum coin and having the Fed buy it as an asset--in effect, replacing $1 trillion in interest-bearing Treasury bonds with the $1 trillion coin.
 
The $1 trillion coin is interesting, but given the size of the nation's debt and the relatively unimpressive size of the coin itself, I propose a $10 trillion stone coin, which could be purchased from the island of Yap for considerably less than $10 trillion.
 
 
The coin could be sited somewhere on the Mall in Washington D.C., where it might become a tourist attraction.
 
In Yap, these are known a Rai stones, and they are money in the sense of being a store of value that can be transferred via oral history rather than physically moved.
 
Thus the $10 trillion stone coin could actually remain on Yap and serve its purpose equally well. However the potential value of the stone coin as a tourist attraction probably makes its transport to D.C. a worthwhile investment.
 
Here's how the $10 trillion stone coin works: the Mint duly issues one $10 trillion coin and transfers the $9.95 trillion seigniorage (recall that there are shipping costs from Yap to D.C.) to the U.S. Treasury.
 
All federal Social Security payroll taxes are cancelled for ten years, providing a payroll tax holiday for employers and employees alike for a decade. (Payroll taxes are about $1 trillion a year.)
 
Compare this with the current method of creating money out of thin air--the Fed creates the money and then distributes it as free money for financiers to speculate with. As Paul Krugman has observed, "money is a social contrivance." Right now, we create money to enrich the already wealthy. That's how we use our social contrivance--to widen the social divisions of the nation.
 
I have already proposed using newly created social contrivances (money) to eliminate all Social Security taxes on employees and employers: How About Ending Social Security and Paying Retirees with Cash? (November 15, 2013).
 
The dangers of creating trillions of dollars out of thin air are obvious. When money is "free," there is no discipline to insure the money is invested or spent wisely. Waste and fraud are as good as prudent investing in the Keynesian Cargo Cult distribution of credit to wealthy financiers. Vested interests with influence over federal spending are delighted to increase their share of the swag, further enriching Elites.
 
If creating money is such a good idea, why not let all of us do so? Why not let everyone print as much as they need to get what they want?
 
The answer is of course runaway inflation, as money that can be issued by everyone in unlimited quantities is instantly rendered worthless.
 
The point I'm making with the $10 trillion stone coin is that if money is a social contrivance, then it should be distributed to those creating goods and services, not those with influence over easily-bought politicos.
 

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Tue, 02/24/2015 - 09:12 | 5821902 techstrategy
techstrategy's picture

Spot on Charles.

Tue, 02/24/2015 - 09:20 | 5821913 forexskin
forexskin's picture

not sure.

the notion that this taxation and subsequent 'debt' that's a fundamental feature of our system being an 'accident' is in doubt.

the f**kers are doing it as a step to the new feudalism. "its a big club, and you ain't in it"

nothing like indentured servitude and rationing for the little people - forever...

imagine a boot on a human face forever...

power for its own sake, hidden to permit plausible deniability.

Tue, 02/24/2015 - 09:23 | 5821932 negative rates
negative rates's picture

Why don't we just use plymouth rock and all take a chip out of that.

Tue, 02/24/2015 - 09:26 | 5821945 Bogdog
Bogdog's picture

Sadly, it's residual value has been fully squandered since 1620.

Tue, 02/24/2015 - 09:29 | 5821954 Headbanger
Headbanger's picture

Why don't we all just get stoned and say fuck it?

Tue, 02/24/2015 - 09:37 | 5821971 Thirst Mutilator
Thirst Mutilator's picture

See that big "O" in the middle? Obama finally got his legacy, he's on a coin!

 

Island of 'YAP [vicinity of] Indonesia no less. You simply can't make this shit up!

Tue, 02/24/2015 - 09:38 | 5821993 Self-enslavement
Self-enslavement's picture

Money is created as credit and can be given freely to all.

Tue, 02/24/2015 - 09:55 | 5822066 SilverIsKing
SilverIsKing's picture

What is the difference between increasing the value of a rock to $10 trillion and changing the value of an ounce of gold to $50,000?

A: the Treasury has many rocks. Gold? Not so much.

Tue, 02/24/2015 - 10:29 | 5822208 J S Bach
J S Bach's picture

Hey... that was Fred Flintstone's coin!  

Tue, 02/24/2015 - 10:47 | 5822293 SafelyGraze
SafelyGraze's picture

a big round stone requires all that chiseling

better to create a dummy business and value it at a trillion

http://en.wikipedia.org/wiki/MEFO

http://en.wikipedia.org/wiki/Mefo_bills

Hjalmar Schacht formed the limited liability company Metallurgische Forschungsgesellschaft, m.b.H., or "MEFO" for short. The company's "mefo bills" served as bills of exchange, convertible into Reichsmark upon demand. MEFO had no actual existence or operations and was solely a balance sheet entity. The bills were mainly issued as payment to armaments manufacturers.

Tue, 02/24/2015 - 09:31 | 5821962 onewayticket2
onewayticket2's picture

it will not be "unlimited" ability to print money....only registered Democrats will get the free money.  

 

see how this works?

Tue, 02/24/2015 - 09:31 | 5821964 NoDebt
NoDebt's picture

So instead of giving the money to Wall St. the Feral Government gives it to itself instead.  Well, for sure, it wil be spent- that's not even in question.  But on what and with whom.... I think you're jumping out of the frying pan into the fire on that idea.

Still, the basic problem is unsound money.  And I guaratee you that coil will be in a museum hundreds of years from now, serving as a shining symbol of when the United States officially jumped the shark and its decline began in earnest.  It'll sit right next to the $100T coin, the $1 Quadrillion coin and the $1 Quintillion coin.

 

Tue, 02/24/2015 - 09:50 | 5822041 RaceToTheBottom
RaceToTheBottom's picture

The museum version of the coin will be stained with blood.  The only question is whose.

Tue, 02/24/2015 - 09:36 | 5821983 Arnold
Arnold's picture

Been there, done that, wore the tee shirt out.

 

http://en.wikipedia.org/wiki/Plymouth_Rock

Tue, 02/24/2015 - 09:30 | 5821944 Unknown User
Unknown User's picture

"It is absurd to say our country can issue bonds and not currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people". - Thomas Edison

"The government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government’s greatest creative opportunity. The financing of all public enterprise, and the conduct of the treasury will become matters of practical administration. Money will cease to be master and will then become servant of humanity." - Abraham Lincoln

 

 

Tue, 02/24/2015 - 09:39 | 5822004 Usurious
Usurious's picture

 

 

debt-money is the disease.........francis taught us that yrs ago....

Tue, 02/24/2015 - 10:23 | 5822182 McCormick No. 9
McCormick No. 9's picture

Edison liked greenbacking, but free energy... not so much. As for Abe- "famous last words" applies.

Here is how we can tell all this talk of a 10 trillion coin is bullshit. It would be just as "easy" to repudiate the debt owed to the Federal Reserve. If the 10 trillion dollar coin is an impossibility, how much more so just to say, "We're not paying you back"?

 

Tue, 02/24/2015 - 09:18 | 5821915 USisCorrupt
USisCorrupt's picture

It makes to much sense to ever work. Even though it is MUCH better than the system we have now. 

 

We can't and must NOT let the Sheeple advance in ANY way.

 

Next Idea.

Tue, 02/24/2015 - 09:51 | 5822052 dufferin
dufferin's picture

real money means 'Private Property' so nope no one can print... there's no such thing

Tue, 02/24/2015 - 11:29 | 5822479 A Nanny Moose
A Nanny Moose's picture

Well you can print, but real money might result in private entities to investigate and punish fraud. Some real criminals might actually face consequences...*cough* Jon Corzine *cough*

Tue, 02/24/2015 - 09:15 | 5821903 new game
new game's picture

meet the big wallets:http://whowhatwhy.org/2015/02/23/meet-big-wallets-pushing-obama-towards-...

snd if the customer(rarely has the wherewithall)needs a loan...

cut the chase, print some moar war...

Tue, 02/24/2015 - 09:15 | 5821907 Sir SpeaksALot
Sir SpeaksALot's picture

well. it all only reminds me that money be it coins or paper, is just an agreement these days.

I seriously prefer the money not only backed by gold (or something very similar) but even better - made of gold.

Tue, 02/24/2015 - 09:19 | 5821919 Philo Beddoe
Philo Beddoe's picture

Ever notice that nobody ever tears little bits off of currency? That is the reason we will never see money made of Gold ever again.  

Tue, 02/24/2015 - 09:27 | 5821948 negative rates
negative rates's picture

Wrong, shaving coins is why we currently have edged coins with slashes, easy to spot the one trying to then spend a shaved coin.

Tue, 02/24/2015 - 09:40 | 5822010 Philo Beddoe
Philo Beddoe's picture

Wrong. Edged coins, silver colored coins and gold covered coins are marketing gimmicks to make a piece of shit appear valuable. 

Tue, 02/24/2015 - 09:18 | 5821918 Last of the Mid...
Last of the Middle Class's picture

Never happen until after the revolution. Bankers will never let politicians abort their ability to create money out of thin air. It has gone waaaaay to far already. Simply put, you cannot unfry an egg.

Tue, 02/24/2015 - 09:22 | 5821930 youngman
youngman's picture

Just think if you had two of those..you could make a goat cart and be livin high on the hog so to speak...and just think your wife would have a bitch of a time taking that to the Mall and spending it....jus sayin...the men would be happy on that island...

Tue, 02/24/2015 - 09:30 | 5821957 negative rates
negative rates's picture

Would the chyrocracker take it as payment when you came to visit? if so, you're good to go.

Tue, 02/24/2015 - 09:23 | 5821934 eddiebe
eddiebe's picture

Well, the powers that be like the way things are just fine, except of course they want more. So take your good ideas and join the police force or the military.

Tue, 02/24/2015 - 09:37 | 5821988 negative rates
negative rates's picture

That's how the U.S. lost the cold fusion reactor, they wanted us to join up and we said, fuck you.

Tue, 02/24/2015 - 09:23 | 5821937 Darth Stacker
Darth Stacker's picture

Hey Charles, you think it would cost $.05 trillion to move a rock to DC? You must work for the govt! Hahah!

Tue, 02/24/2015 - 11:22 | 5822439 Cheduba
Cheduba's picture

Beat me to it.  Where do I sign up for that $50 billion shipping contract?

Tue, 02/24/2015 - 11:43 | 5822536 813kml
813kml's picture

The dockworkers union charges a flat fee of $49.999 billion to unload precious rocks.

Tue, 02/24/2015 - 09:24 | 5821938 Bogdog
Bogdog's picture

Why not use dried pig shit instead of stone? It would have the same meaning in the end. And we wouldn't have to go to Yap to get it.

Tue, 02/24/2015 - 09:33 | 5821968 Headbanger
Headbanger's picture

Yeah..  And what would be the difference having pigs "print" the money versus the one's we have in the Feral Reserve now?

Plus we could serve em up for ham & cheese and bacon when we want!

Tue, 02/24/2015 - 10:45 | 5822279 bullchit
bullchit's picture

Pigs produce cheese? Who knew?
Maybe the pigs on the hill, yeah, that's it.

 

Tue, 02/24/2015 - 09:28 | 5821950 Drachma
Drachma's picture

In this fiscal year I think I'll increase the capital in my business by transfering all outstanding debts to their proper asset accounts. I can then use this as collateral to get more in debt, therefore increasing my equity. Alas, too bad the company is debtless. I could have done a lot of good for my business. ;)

Tue, 02/24/2015 - 09:29 | 5821952 bugs_
bugs_'s picture

Attach the Stone of Shame.....

Tue, 02/24/2015 - 09:31 | 5821959 Kidrobot
Kidrobot's picture

The 'seigniorage' method via the coin makes more sense than a loan + interest deal from the treasury, so go for it.  All opposing central banks should be in favor or it.  Regarding inflation, there is a middle ground between the two ideas...This 'money printing' privilege should somehow be limited and scaled to households with a net worth of under X million, so that the uber elite wealthy are having their portion eroded, while the majority can close the gab.  

Tue, 02/24/2015 - 09:32 | 5821969 BolshevikPartyP...
BolshevikPartyPlanningCommitee's picture

Under the National Socialists, Germany’s money wasn’t backed by gold (which was owned by the jewish bankers).  It was essentially a receipt for labor and materials delivered to the government.  Hitler said, “For every mark issued, we required the equivalent of a mark’s worth of work done, or goods produced.” The government paid workers in Certificates. Workers spent those Certificates on other goods and services, thus creating more jobs for more people.  In this way the German people climbed out of the crushing debt imposed on them by the jewish bankers. NOW you know why the jews declared war on Germany in 1933.

Send the parasites to the woodchippers around the world.  The jew tares are being exposed above the wheat....

Tue, 02/24/2015 - 14:37 | 5823133 Anusocracy
Anusocracy's picture

Either way, someone or group is enslaving those who produce.

Does it matter much who you are an obedient slave to?

Tue, 02/24/2015 - 10:31 | 5821978 oudinot
oudinot's picture

If one wants to talk about money, David Graeber's book, "Debt: the first 5,000 years" (Melville House Publishing,2014. ISBN:978-612219-319-6), is a must read.

The leftist anthropologist might not be your average ZHer's cup of tea, however he makes wonderful, accurate, counter-intuitive   arguments  countering traditional ideas about money.

For instance he puts the theory of coined money being a better method of payment than bartering to bed as a myth.  Actually, bartering was never really used in ancient times; the ancients had very systematic, complicated credit systems all the way from Assyrian temples 5,000 years ago.

Coined money emerged in Europe, Middle East and China at roughly the same time, the sixth century BC.  Coined precious metal money was 'invented' to pay for 'modern' professional armies.

Tue, 02/24/2015 - 09:39 | 5822003 Arnold
Arnold's picture

This article is just plain silly.

On to more rational thoughts......................

Google:drones over Paris.

Tue, 02/24/2015 - 11:47 | 5822554 813kml
813kml's picture

Forget the frogs, I'm more concerned about the Moons Over My Hammy.

Tue, 02/24/2015 - 09:45 | 5822030 VW Nerd
VW Nerd's picture

My question is why do the major Wall Street and London banks have to act as the middle man, buying dollars from the Fed at .25% from the discount window and sell that money to the Treasury (taxpayer) at an approximate 8 fold increase, about 2% +/-?  I doubt any government would afford any of us that indulgence.  Of course, we all know the answer.....the major banks are who own and operate the system.  These interests defend this corrupt monopoly arrangement claiming that if the Treasury borrowed directly from the discount window, this would be monetization, printing press money, and that it would eliminate any fiscal restraint on Congress.  oh, heah....right.  Hopefully more and more people will recognize this arrangement for the racket that it is.

Tue, 02/24/2015 - 16:29 | 5823704 Tombrownssoul
Tombrownssoul's picture

Plus you have to consider that when the  same bankers require a bailout, they go cap in hand to the government who than are allowed to monetise the bailout funds. If the Fed's discount window was operating on on a highest credit rated customer ( ie the government through the taxpayer) coming first, than obviously the government should borrow at the discount rate. But the banks have turned logic on its head. 

Tue, 02/24/2015 - 09:46 | 5822034 RaceToTheBottom
RaceToTheBottom's picture

Taxes have become a historic relic as well, just pay for them via seigniorage as well.

Lets rid ourselves of all these historical relics as well like gold, etc....

 

Tue, 02/24/2015 - 09:55 | 5822064 cowdiddly
cowdiddly's picture

Im in if Yellen's head will fit through that hole

Tue, 02/24/2015 - 09:54 | 5822065 Bryan
Bryan's picture

Brilliant.  A good illustration of the rabbit hole that we are traveling down at the moment.  But really... all this has been attempted and failed before - and several times at that.  Humans have this incredible capacity to forget the past when it's inconvenient.  Gee, that reminds me of a quote by a famous guy named Santayana.

Tue, 02/24/2015 - 09:55 | 5822069 Panic Mode
Panic Mode's picture

Gold --> Fiat currency --> Bit coin --> Stone coin

Can you see the pattern here? The reverse of evolution from intelligent human being to chimpanzee.

Tue, 02/24/2015 - 10:15 | 5822148 wherewasi
wherewasi's picture

50 billion for shipping?  Can I arrange the transportation PLEASE?

Tue, 02/24/2015 - 11:18 | 5822414 Hope Copy
Hope Copy's picture

I think that there is a 'little' reservation transfer tax (commonly known as sales tax).

Tue, 02/24/2015 - 10:19 | 5822166 Smuckers
Smuckers's picture

Rock, paper, scissors.

Paper covers rock - but scissors stab out the eyes of bankers.

Tue, 02/24/2015 - 10:35 | 5822231 e_goldstein
e_goldstein's picture

Big Sis approves this message.

Tue, 02/24/2015 - 10:20 | 5822170 NotApplicable
NotApplicable's picture

What I find amusing is that some of the same people I've seen kick around the idea of the $1T platinum coin are the same ones who will tell you there's not enough gold to serve as money.  o_O

Tue, 02/24/2015 - 10:22 | 5822178 T-NUTZ
T-NUTZ's picture

We could disconnect Money and Labor completely.  I bet we could GMO some trees to grow Money...

Tue, 02/24/2015 - 11:03 | 5822346 A_latvian
A_latvian's picture

Right on.

I've always wondered why the government is in this shell game with the PRIVATE Federal Reserve. It is illegal for the Fed to create money, yet they do so by the billions every day. How is no liberty-loving politician calling them out on it?

If you're going to create money, fine. At least do it legally and leave the bankers out of it.

Tue, 02/24/2015 - 12:35 | 5822657 nah
nah's picture

The world wants our money because they know where it comes from.

.

our debt is a gift and our taxes a great invention

Tue, 02/24/2015 - 13:12 | 5822780 de Cosmos
de Cosmos's picture

Let's just skip all these interim steps and go directly to the Infinity Quantum Turd.   How much is it worth today?   Well, how much do you want it to be worth today...

 

Tue, 02/24/2015 - 14:01 | 5822975 cynicalskeptic
cynicalskeptic's picture

It comes down to a fundamental question:

Is 'money' - or the supposed version of it issued by government - a store of value (of labor expended or value added) or is it inherently valueless - something that can be created out of thin air? 

Because if government or any other entity can create 'money' out of thin air than it is DEVALUING ALL LABOR. When unlimited 'money' can be created out of thin air - and evenMORE 'money' 'earned' by using those funds than the value of expended labor becomes less and less in a society.

Ywet the only REAL wealth in a society comes from 'adding value' - expending labor to create goods or services.

The current system rewards PARASITES not those actually WORKING.

Tue, 02/24/2015 - 14:43 | 5823176 Silversinner
Silversinner's picture

money is not something tangible.

money is your own inner value system.

gold and silver are just(for a thousand reasons)

the best suited tools of counterbalance on the

weighing scale.

 

Tue, 02/24/2015 - 17:19 | 5823961 flyingcaveman
flyingcaveman's picture

Why not just an all-the money-in-the-world coin?  Its not that much different than the all the money you can print situation except for who is issuing it.

Tue, 02/24/2015 - 17:29 | 5824000 TheAntiProgressive
TheAntiProgressive's picture

I have a smaller one in my back yard looks just like this one.  Think I can get say 5 T for it?  I think it is better condition than the one pictured.  Not uncirculated but better than VG.

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