The trillion-dollar coin would be deposited with the Federal Reserve and so improve the government’s account thereby enabling it to borrow another one trillion dollars and avoid the ‘fiscal cliff’ or debt limit. In this cunning way, the official legal debt limit would have been evaded.
Why one trillion? Well it’s a nice number, not too small and not so big that you cannot get it into one sentence. Moreover, and please do not laugh, there are those who say it could be two trillion and, as the situation is, it might well come to be.
Of course there are rotten spoilsports like the USA Treasury and the Federal Reserve who are saying that they will have nothing to do with a ridiculous idea. Which is brave talk because there is now the possibility that the one trillion platinum coin may be thrust upon them whether they like it or not. This is because the coin would temporarily alleviate the USA budget situation by allowing the government to carry on its present pattern of spending without for example, slashing welfare benefits or sharply raising taxes.
But only temporarily. The permanent underlying problems are not being addressed by the Democrats, the Republicans, the Treasury, the Federal Reserve or academics.
Firstly, America is now a hugely aggressive, and very expensive, military empire. The latest news is that American troops are going into thirty five African nations to create mayhem and assassinate civilians; the USA has a seeming determination to precipitate a Sino-Japanese war; and, in any case, with its foreign policy controlled by Zionism and heavily influenced by the Christian Zionists, it is doing its best to engineer some form of major war in the Middle East.
The USA also has somewhere around nine hundred military bases around the world and, if all its military expenditure were to be openly admitted, instead of disguised in obfuscating accounts, it would probably be somewhere towards half of the world’s total.
Secondly, gripped by elitist financial fascists and the military-industrial complex intent on enriching themselves at the expense of the middle classes, the USA has permanently exported the jobs of 56,000 commercial enterprises. The spending of each worker supports another four jobs so that, in all, thirty two million jobs have been lost for ever.
The trillion dollar platinum coin, therefore, not only increases the (already un-repayable) American national debt but does not address the profound structural problems. So its minting seems unlikely.
But watch this space. If the American politicians refuse to allow the debt limit to be raised and do not address the structural problems, the platinum coin may yet be minted, no matter how ‘ridiculous’ that is thought to be by the Treasury and Federal Reserve.
Does gold have anything to do with this?
Unfortunately, yes. The USA, UK and Japan are engaging in competitive devaluation which means they are printing money to try to lower the price of their exports and to stimulate their domestic economies. At some point, it may be sooner or later, although housewives and others are already sharply aware of rising prices, there will be big inflation.
On top of which many nations are no longer trading in US dollars but are preferring to make regional groupings using their local currencies or bartering. In short, the USA dollar is looking increasingly weak.
This matter is much more serious than it seems because many people believe that the gold alleged to be held in the Federal Reserve has already been pledged or lent so many times already that, even if it exists, any one piece of gold has several competing claims on it.
As a result big question marks exist over the actual existence of the USA’s gold, AND whether the gold of other countries, kept by the USA, really does exist, AND even whether such gold as the USA holds, really is gold or a lot of gold-coated tungsten bars.
Not surprisingly, therefore, possibly following Venezuela’s example or even the advice of financial journalist Max Keiser who, four years ago, memorably exhorted the German people to look after their gold, Germany’s central bank is planning to repatriate its gold from the USA Federal Reserve and elsewhere, including the UK. Germany, moreover, allegedly the trusting friend of France, is also repatriating its gold from Paris.
Other countries can be expected to follow the lead of Germany and, for that matter, of Venezuela.
In the UK, the Queen has been visiting the bank of England’s gold vaults in the endeavour to create the impression that all is well. The Federal Reserve is trying the same trick.
But, however you look at it, all is not well not least because any gold in the Federal Reserve or the Bank of England, if not already pledged, could be pledged without the true owner knowing anything about it. In fact, the gold could simply be expropriated. As they say, possession is nine tenths of the law.
Not surprisingly, countries such as China believing, where countries are concerned, that a piece of gold in hand is worth two in the bush, are known to be building up huge gold reserves.
So the news about platinum and gold is telling us something. Although the platinum coin is really about egregious money printing and gold is about something which is substantially the opposite, both relate to an American economy and its politics which no longer serve the interests of its people let alone the rest of the world.