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downloadAccording to former US Mint Director Philip Diehl, a trillion-dollar platinum coin could be minted.
Diehl and the Platinum Eagle coin in US
Diehl said this in an interview with Axios, in which he said it would allow the US to buy the equivalent of a trillion-dollar increase in debt, without any impact on inflation.
The coin could be minted in a matter of hours, should the Secretary of the Treasury decide to do so, and would in fact require only a change in the denomination of the one-ounce Platinum Eagle coin that is already in production. The Mint would have no shortage of platinum in stock to issue it.
The American Eagle Platinum is a platinum coin that has been in production since 1997, America’s first and only official platinum coin, and offers investors an easy way to invest in platinum. In fact, their purity is guaranteed by the US government.
They are, to all intents and purposes, legal tender and their face value is only symbolic. For example, the one-ounce platinum coin has a face value of $100, whereas the current market value of an ounce of platinum is over $900.
This means that one could change the face value of the coin, and print more of it. It is not clear, however, why the possible introduction of such a coin on the market would not generate inflation.
Diehl ran the US Mint from 1994 to 2000, during the very years of the coin’s launch, but it seems that Treasury Secretary Janet Yellen has no intention of accepting his proposal.
The US and raising the debt ceiling
The problem is that the solutions envisaged by Congress for the debt ceiling problem could take weeks to implement. This could be an emergency measure that could theoretically be activated much earlier, with the aim of bridging the gap between running out of money and raising the debt ceiling.
In the US there would be a significant public debt crisis, putting the country at risk of default. President Biden himself has asked Republicans not to stand in the way of Congress’ decision to raise the debt ceiling.
Since March 2020, the Fed has been creating huge amounts of dollars out of thin air and injecting them into the market to deal with the damage caused by the pandemic. The total assets on the US central bank’s balance sheet have soared from around 4 trillion in February 2020 to 8.4 trillion today, doubling in just over a year. This led to inflation rising from 1.4% in January to 5.4% in June, then falling to 5.3% in August.
Placing another trillion dollars on the market, through the face value of a platinum coin, would almost certainly produce similar effects.
According to some analysts in the US, with this monetary policy, they have already had to admit that they made a big mistake by considering the inflation they are causing temporary since it is now commonly considered to be lasting.
But there is Bitcoin, which not only has a deflationary nature, but also has a guaranteed, absolutely predictable, and practically unchanging monetary policy. And in at least one country in the world, it is already legal tender, at which point in the event of excessive inflation it could also become a real alternative to the US dollar.