those are some big coins. Who would pay for the metals for those coins ? and then how tough are the scissors to cut them up to tiny bits for each person ? what happens if there's nothing left of the coin to continue to pay people indefinitely ? one would need debt (bonds) etc to get money to get the metal to make the coin (plus the creation of them), then some $$ to chop it up, delivery method, fixed conversion, eegads ... I'm lost.
I don't know what their problem is ... I already bought into US debt with this $20 Trillion coin PCGS slabbed and graded as PR-RUC Proof - Are You Crazy This is a US Mint coin isn't it ??
The Federal Reserve Bank and the U.S. Treasury are already doing this without the coins. The Federal Government sells bonds to the Federal Reserve which creates money with a computer entry to pay for them. There are no coins or paper money involved; the Fed doesn’t even have to print the money. From what I’ve heard, the amount will be $4 trillion, which an unbelievable amount of money. When I was in undergraduate school in the late 1960s, my Keynesian economics professor described this as something that would never happen, at on a direct basis between the Fed and the Government. Now it’s a matter on policy. This policy can be highly inflationary, and I am concerned about the ramifications of this in the months to come
This is not the first time this has been suggested. Back when the debt was around 13 trillion it was suggested to mint several trillion dollar coins to pay off the debt. And technically it would work since they count the seigniorage of the face value over the metal cost + cost of manufacturing as profit/income and that amount gets transferred into the general fund. They don't have to be purchased by the Federal Reserve, it effectively creates money out of thin air. Problem is dumping huge quantities of unbacked cash into the economy tends to create inflation and accerates the downward spiral of the value of the money.
Yes, I remember this very idea coming up in the context of the 2008 crash. It makes as much sense as anything else that goes on with monetary policy.
I've felt the same way about previous rounds of explosive money-printing, and I'm still waiting on hyperinflation. The only thing I can figure is that as long as we're the world's reserve currency, we aren't going to go full toilet-paper.
I have a buddy with a 3" deep stack of Iraqi Dinars. He has been telling me more than ten years that stack of paper is going to make him wealthy..... The paper has more value than the money. I think each one of those dinar notes is worth a half cent.
The factor that kept us from seeing hyper-inflation was a slow-down in the velocity of money, the number times a dollar is spent in a quarter. A quick search led me to the St. Louis Federal Reserve Bank site. It shows the number down from a high of 2.2 in the third quarter 1997 to about 1.4 in the fourth quarter of 2019. These numbers a measured against M2, which is the money in circulation plus savings deposits, money market accounts and CDs held by individuals that amount to less than $100,000 If that number heads back up, watch out. Inflation is on the way. The question is how bad does it get? I hope I’ve not been too technical here.
That makes sense. And one of the problems we're trying to address right now is presumably a massive reduction in the velocity of money, given all the people who can no longer earn it, and all the places you can no longer spend it, and all the cascading effects from each of those factors. (Cheesecake Factory can't host sit-down diners and can't make ends meet with carryout, so they announce that they won't be paying rent on April 1, which means all those landlords are not getting $XXXXX that they were expecting, which makes it harder to pay their employees...)
Whoever holds that coin will be holding the most money in human history! At least in fiat terms... And, I'd be curious as to what the design would be. Since it's a one-off, it'll probably be some rushed, generic design pulled from the files somewhere for past proposals.
