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- The US Mint could create a $1 trillion platinum coin within hours of an emergency decision to do so, a former director told Axios.
- "This could be quickly executed on the existing plaster mold of the Platinum Eagle," Philip Diehl said.
- While it is possible, Treasury Secretary Janet Yellen shot down the idea of minting such a coin in a CNBC interview.
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A $1 trillion coin could be minted within hours of an emergency decision by Treasury Secretary Janet Yellen to avert a default on America's debts.
Philip Diehl, the former director of the US Mint from 1994 to 2000, told Axios that the agency has no shortage of platinum coin blanks. That's the metal required to make such a coin, according to the law that the entire idea is based upon.
"This could be quickly executed on the existing plaster mold of the Platinum Eagle," Diehl explained, adding that only the denomination of the coin would need to be changed.
After that, the $1 trillion coin could be created within minutes at the West Point, N.Y., mint and flown to the New York Fed for physical deposit via helicopter.
The swiftness of creating a $1 trillion coin could serve as an extreme last-minute option if Congress fails to raise the debt ceiling before the Treasury runs out of money on October 18.
But as Treasury Secretary Janet Yellen urges Congress to raise the debt ceiling in order to avoid an economic catastrophe, she is also knocking down the idea of the $1 trillion coin solution.
In an interview with CNBC on Tuesday, Yellen said of the coin, "I'm opposed to it, and I don't believe we should consider it seriously. It's really a gimmick, and what's necessary is for Congress to show the world can count on America paying its debts."
A vote is scheduled for this Wednesday to suspend the debt limit through the end of next year, but opposition from Senate Republicans gives it little chance of passing.
There would likely be many drawbacks from the materialization of a $1 trillion coin, including undercutting faith in America's monetary system and dragging the Federal Reserve into a high-stakes political battle, former Obama administration economist Jason Furman told Insider last month.
But the coin "gimmick" would effectively give the Treasury department the funds it needs to pay its debts and avoid an almost guaranteed economic recession in the scenario that Congress fails to act and raise the debt ceiling in time.
"Voila, we'd have bought ourselves the equivalent of a trillion-dollar increase in the debt limit, without any impact on inflation," Diehl said.
source https://www.businessinsider.com/trillion-dollar-coin-minted-within-hours-potential-emergency-decision-yellen-2021-10