(Reuters) - So much for the $1 trillion platinum coin idea.

The U.S. Treasury Department said on Saturday it will not produce platinum coins as a way of generating $1 trillion in revenue and avoiding a battle in Congress over raising the U.S. debt ceiling.

The idea of creating $1 trillion by minting platinum coins has gained some currency among Democrats in recent days as a way of sidestepping congressional Republicans who are threatening to reject a necessary increase in the debt ceiling unless deep spending cuts are made.

The Treasury Department and the Federal Reserve, both independent of one another, each concluded this was not a viable option.

"Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit," said Treasury spokesman Anthony Coley in a statement.
Congress' refusal in 2011 to raise the debt ceiling unless the White House agreed to large spending cuts brought the United States close to the brink of a debt default and dealt the weak recovery a setback.

Another crisis is brewing as the United States is expected to reach its authorized debt limit of $16.4 trillion in February.

White House spokesman Jay Carney said that with the platinum coin question resolved, the pressure is on congressional Republicans now to act to raise the debt ceiling.

"Congress can pay its bills or they can fail to act and put the nation into default," he said. "When congressional Republicans played politics with this issue last time, putting us at the edge of default, it was a blow to our economic recovery, causing our nation's credit rating to be downgraded."

There was also no change in Obama's opposition to another possible way to get around Congress that some Democrats support - that of invoking a line in the 14th amendment to the U.S. Constitution.

Part of the 14th amendment says the validity of the public debt should not be questioned, which some Democrats take to mean that the president can raise the debt ceiling on his own. The White House says it does not believe that approach would stand up legally.
"Congress needs to do its job," said Carney.

The idea behind the platinum coin was that Treasury would mint a coin or coins from the precious metal and that the value would be placed at $1 trillion.

For the plan to work, the Federal Reserve would have to deposit it in the Treasury account and credit the account $1 trillion that could be used to pay the nation's bills.

But if the Federal Reserve does not believe that the coin is worth $1 trillion and refuses to buy it, then the plan falls apart.

Some liberals, like New York Times columnist Paul Krugman, had supported the idea and a petition submitted to the White House website had thousands of signatures. This kind of momentum prompted both the Fed and the Obama administration to consider the concept, and they ultimately decided it would not work.

Of course it never dawns on anyone that the Treasury could print money directly the way Lincoln did and inject it directly into the economy. How is the Fed supposed to make money? Obviously stuff like bonds & trillion dollar coins have to be passed to the fed to hold as security on LOANS AT INTEREST to the american people. Only then can everybody (in banking) be happy as clams.

http://direct.mises.org/daily/5515/Saved-by-a-TrillionDollar-Coin

Saved by a Trillion-Dollar Coin?

Mises Daily: Thursday, August 04, 2011 by Robert P. Murphy


Now that the "crisis" over the federal debt ceiling has been averted, we can leisurely explore two of the wackier proposals that emerged during the state of panic. Not surprisingly, the schemes involved the Federal Reserve and its ability to circumvent, not just standard accounting, but also the traditional divisions of political power. It's worth studying the episode carefully because we will probably see one or more of these "solutions" promoted as the only answer to another crisis in the not-too-distant future.
Bernanke and Geithner Don't Need No Stinkin' Debt-Ceiling Increase

Late last week, when more and more analysts contemplated the horror of a US government default and partial shutdown, Jack Balkin — a professor of constitutional law at Yale — outlined strategies that the White House could use to evade the pesky borrowing ceiling imposed by a fickle Congress:

Are there other ways for the president to raise money besides borrowing?

Sovereign governments such as the United States can print new money. However, there's a statutory limit to the amount of paper currency that can be in circulation at any one time.

Ironically, there's no similar limit on the amount of coinage. A little-known statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. So some commentators have suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.

The government can also raise money through sales: For example, it could sell the Federal Reserve an option to purchase government property for $2 trillion. The Fed would then credit the proceeds to the government's checking account. Once Congress lifts the debt ceiling, the president could buy back the option for a dollar, or the option could simply expire in 90 days. And there are probably other ways that the Fed could achieve a similar result, by analogy to its actions during the 2008 financial crisis, when it made huge loans and purchases to bail out the financial sector.

The "jumbo coin" and "exploding option" strategies work because modern central banks don't have to print bills or float debt to create new money; they just add money to their customers' checking accounts.

These suggestions should horrify anyone who understands the importance of sound money. Not only are the proposals themselves preposterous, but the mere fact that they are being discussed is a symptom of the cultural decadence wrought by the government and the Fed's responses to the 2008 financial crisis.
Money for Nothing

When critics of the Fed assert that Bernanke creates money "out of thin air," they mean the following: The Federal Reserve has the power to buy whatever assets it wants at whatever price it wants. In principle, Treasury Secretary Geithner could sell a paperclip to the Fed for $2 trillion. The Fed would simply write a check made out to the Treasury, drawn on the Fed itself.

When the Treasury deposited this check with its own bank — which just so happens to be the Fed — then its own "checking account" balance would go up by $2 trillion. This money wouldn't come from anywhere in the sense that some other account would need to be debited $2 trillion. On the contrary, the system's total reserves (and what is called the "monetary base") would have swelled by $2 trillion. The Treasury would be free to start paying bills by writing checks on the $2 trillion in its account.

The only kink in the plan would be the state of the Fed's balance sheet. Initially it could value the paperclip at $2 trillion — what the Fed paid for it — and list the paperclip among its other assets such as Treasury bonds and mortgage-backed securities.
"These suggestions should horrify anyone who understands the importance of sound money."

Of course, people in the financial markets would cry foul. They would know that if the Fed's books were "marked to market," the paperclip would be worthless and the Fed would suddenly be insolvent according to regular accounting rules. (Its liabilities, in part consisting of bank reserves — which are dollar-denominated claims on the Fed — would have risen by $2 trillion, while its assets didn't budge.) But this would merely be an embarrassment rather than a legal obstacle because the Fed has put into place Orwellian rule changes that allow it to shield its shareholder equity from capital losses.

The difference between my absurd paperclip scheme and the two proposals discussed by Balkin is one of degree and not of kind. As of this writing, platinum is trading for a little less than $1,800 per ounce. Thus, $2 trillion in platinum would weigh about 35,000 tons, almost one-sixth the weight of the Sears Tower. (Those would be two of the heaviest coins Bernanke would likely encounter in his life.) Clearly, the platinum coins stamped "$1 trillion" would not actually be worth that in terms of the metal content.

Things are just as bad with the option scheme in which the Fed would quite deliberately pay $2 trillion for an asset that it intended to hold until it expired as worthless. At least my hypothetical paperclip would still be useful after 90 days.
Debasing the Money, As Well as the Public's Ideology

Conventional "open-market" operations are a convoluted form of legalized counterfeiting, as I've explained before. The virtue of Balkin's discussion is that the sleight-of-hand is minimized and most readers will be able to see the naked redistribution in all its glory (or lack thereof). We are moving ever closer to the point at which the government runs the printing press to directly pay its bills, just as surely as the monarchs of old who added base metals to the coinage of the realm.

The danger of these proposals doesn't consist solely in the price inflation and transfer of purchasing power that they would entail if implemented. No, simply the discussion of them by allegedly sophisticated scholars further degrades the public's understanding of money. More and more Americans are "learning" that saving and frugal living is a sucker's game, because the Treasury and Fed will simply create money to bail out their rich buddies.

Conclusion

Flawed as it is, the US Constitution vested fiscal authority with the Congress — rather than with the Executive Branch — for an important reason. The president has several advantages, not least of which is his (or her) ability to wage war. Therefore the Constitution seeks to limit that power by keeping the purse strings in the hands of elected representatives.

If the Treasury ever falls back on a scheme such as the ones Balkin discusses, the United States will be one step closer to an outright dictatorship. The American president now claims the authority to execute US citizens without any judicial oversight at all. This is not a person to whom we should grant a printing press.

I heard that the oil baron's (J.P. Morgan & Rothschild family) plan was to start a war in the Middle east, default on our contract for oil with the Saudi's, and pay off our national debt by charging $150.00 per barrel for oil in America when we have huge reserves stashed and are producing so much it should cost only a fraction of that.

That was the rumor anyway.

http://thepeoplescube.com/peoples-blog/infinite-wisdom-in-government-t10060.html#150987

Infinite Wisdom in Government(yeah right)


Treasury Security Tim "Spend It ALL!" Geithner suggested on Friday that the national debt limit be raised to infinity.

When asked, specifically, what that meant and just how high infinity could go, Geithner said "Just imagine President Barack Obama's goodness! Or even the stiffness of Nancy Pilosi's face, for that matter".

Geithner stated that "it was time a long time ago" to eliminate the debt limit, and that only Congress could solve this problem, although he hinted that hate-filled Rethugglikkkans in the House would probably block any bill that proposed infinite debt.

President B. Hussein Obama was unavailable for comment, having just jetted off on Air Force One to play a few dozen rounds of golf overseas; First Lady Above the United States Moochele Obama was also unavailable, as she and 500 of her closest friends and relatives are currently in the Bahamas vacationing........................

Of course I would be in favor of eliminating the debt limit if there was NO INTEREST ON THE MONEY BORROWED.

Just make the money out of thin air as they always do.

They could always print the $100,000 bill with Woodrow's picture on it like they did in the great depression.

If you really thought about it, you don't want an infinite debt ceiling. They are borrowing the money from YOU, so you are really the creditor that saves them from bankruptcy by virtue of the fact that you cover their borrowing.

With an infinite debt ceiling, how could you foreclose on a poorly run company in receivership?

Take it from me...You DON'T WANT an infinite debt ceiling...In fact you don't want the existing one...You should have foreclosed on the dump years ago, even at pennies on the dollar.

Interesting thought, but how can they be borrowing the money from us? (Aren't we the collateral?)

(If they are borrowing the money from us, then when are they going to pay it back?)

How can we foreclose on them?

The real money is your energy...the energy output in goods & services produced by living people. Where does this energy come from?...It comes from you, so in reality it is your money that you have been conned by fraud into giving to the government to give to the banks.

Fraud is a bona fide crime and the clock may not run against the people to prosecute the offenders and take back their money (in equivalently valued gold perhaps?)

In the old days, when the people went to the banker to get their money and it wasn't there, they hanged the banker for his fraud. The same fraud is going on today, just on a much larger scale. The banks have protected themselves by bribing de facto "governments" to pass legislation to legalize the fraud. That and concealing from people the true nature of economic & banking systems (dumbing them down & distracting them) has created a population where the vast majority hasn't an inkling what's going on. This too serves the bankers' interests and allows them to rob whole nations of people.

If you walked down to the Fed to arrest anyone, you would find them well-protected by the very law enforcement agencies & officers who should be arresting them in the first place. Most people would see YOU as the criminal and troublemaker...But imagine the people catching on...

Now it isn't just you, but most of the people in the nation screaming for justice...Think the agents & agencies are gonna protect them from arrest now?...Think now that they can't be tried & sentenced for fraud?...Think even the international banks wouldn't give back the money if we threatened drone strikes on the BIS?

The banksters might be elitist, powerdrunk psychopaths...but they ain't THAT stupid!



By first foreclosing on your "country."...Your country is simply a business operating in receivership, and as I explained earlier, that company depends on your energy (money) to stay open for business. There has been a deception pulled on people that essentially splits them into more than one entity...It makes an agency out of them which consists of a principal and an agent. The principal has been hidden from most in the "private", while the agent is what appears in public (and is all people think they are...They don't understand how they can be more than one thing)

The agent is the employee...the "citizen" of the corporation and bound by its rules. The principal is the creditor of the corporation, who unknowingly finances it and allows it to stay open for business.

When people finally figure out who they really are, the corporation and the banks will be "toast"...At that point, people will get back the free republic under the rule of law that it should have been all along.

Apparently, the US government had a "peachy" idea to alleviate some of its debt...Give China major equity in the country itself (i.e. make a large swath of the US property of China).

Looks like ol' Woody Guthrie had it wrong...This land USED to be your land...It has since been sold out from under you by a treasonous government that has been robbing the nation for decades!

[url}http://fromthetrenchesworldreport.com/china-poised-to-play-debt-card-for-u-s-land/32302/