As
our site name implies, we have more than a passing interest in monetary
theory. As such, ideas for new types of coin and currency are of
special interest. When the value of the coins proposed contains an
insane amount of seigniorage, we are compelled to call it out.
The Fiscal Cliff melodrama playing out in the halls of US Federal Government’s Capital has given rise to the above mentioned monetary insanity.
As the so called, moronic “Fiscal Cliff” false alarm approaches, it becomes more common for those of a Socialist/Statist leaning philosophy to search for easy solutions to what amounts to enabling catastrophic policy failures, out of control spending, and unsustainable debt pacts.
This is not surprising, as Socialism and economics are incompatible philosophies. Anyone who claims otherwise either mistakenly applies small system theory to large scale systems or is a shill. From one of these insane theorists comes the idea of the US Treasury coining a trillion dollar platinum coin to deposit at the FED, who would then cancel the Treasury’s debts.
This will not happen, first and foremost, because the insane monetary system relies on debt as its lifeblood, as such, any debt cancellation by the underlying foundation of US Treasury debt is out of the question.
Second, it must be recognized that coining a trillion dollar coin, theoretically equal to 1/60 of global GDP, that anyone other than the FED would accept at face value, is impossible, it simply flies in the face of reason. The FED has been paying 100 cents on the dollar for the MBS toilet paper that banks have sold to them for years now, as such, any concept of value left the halls of the Federal Reserve years ago.
The third reason is that the US debt at the FED has already been largely canceled via the FED’s various QE operations over the past several years. For the reasoning as to why the official US Debt held by the FED hasn’t been lowered to better reflect its true drag on GDP, we refer fellow taxpayers back to reason one.
We will present more data to back this claim in the coming week. In the meantime, if someone offers you a trillion dollar coin, be sure to check the spot price of platinum before making a more reasonable counter-offer. In any event, you are better off holding the platinum, as someday it will be worth are least a trillion Federal Reserve notes, the shills at the FED and Treasury have assured it.
The Fiscal Cliff melodrama playing out in the halls of US Federal Government’s Capital has given rise to the above mentioned monetary insanity.
As the so called, moronic “Fiscal Cliff” false alarm approaches, it becomes more common for those of a Socialist/Statist leaning philosophy to search for easy solutions to what amounts to enabling catastrophic policy failures, out of control spending, and unsustainable debt pacts.
This is not surprising, as Socialism and economics are incompatible philosophies. Anyone who claims otherwise either mistakenly applies small system theory to large scale systems or is a shill. From one of these insane theorists comes the idea of the US Treasury coining a trillion dollar platinum coin to deposit at the FED, who would then cancel the Treasury’s debts.
This will not happen, first and foremost, because the insane monetary system relies on debt as its lifeblood, as such, any debt cancellation by the underlying foundation of US Treasury debt is out of the question.
Second, it must be recognized that coining a trillion dollar coin, theoretically equal to 1/60 of global GDP, that anyone other than the FED would accept at face value, is impossible, it simply flies in the face of reason. The FED has been paying 100 cents on the dollar for the MBS toilet paper that banks have sold to them for years now, as such, any concept of value left the halls of the Federal Reserve years ago.
The third reason is that the US debt at the FED has already been largely canceled via the FED’s various QE operations over the past several years. For the reasoning as to why the official US Debt held by the FED hasn’t been lowered to better reflect its true drag on GDP, we refer fellow taxpayers back to reason one.
We will present more data to back this claim in the coming week. In the meantime, if someone offers you a trillion dollar coin, be sure to check the spot price of platinum before making a more reasonable counter-offer. In any event, you are better off holding the platinum, as someday it will be worth are least a trillion Federal Reserve notes, the shills at the FED and Treasury have assured it.
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