Post
Topic
Board Economics
Re: If the USA can't raise the debt ceiling in time what will happen to the price?
by
mpfrank
on 03/08/2011, 01:40:30 UTC
Also, Title 31, sec. 5112, paragraph (k) of the U.S. code explicitly authorizes the Treasury department to issue as much money in the form of platinum coins as it wishes, at its discretion.  So, in a pinch, Geithner could always just stamp out a few platinum coins marked "ONE TRILLION DOLLARS" each, and make the debt problem go away.

(Source: http://www.law.cornell.edu/uscode/31/5112.html; some discussion at http://www.alternet.org/news/151718/there%27s_a_solution_to_the_debt_fight_that_could_avert_catastrophe_--_why_is_everyone_ignoring_it/)

How is that not a default?

Only because the debt would have, legally, been paid.

Of course, those receiving the trillion-dollar platinum coins would probably be a little upset.

Or they might just deposit them, flooding the USD market, and life would go on, albeit with a new surge of inflation.


Yes... I assumed that if this happened, they'd have been deposited in the U.S. Treasury's account at the Fed...