A $1 Trillion Platinum Coin!!!
If Congress refuses to increase the debt limit, policy makers are debating whether or not a platinum one trillion dollar coin would be a good way for President Barack Obama to gain leverage against the Republicans in the upcoming debt ceiling fight. The Federal Reserve controls the US printing press and the Treasury is not allowed to print money to cover the government deficits. However, a loophole in the law allows the Treasury unlimited ability to produce platinum coins of any denomination (for coin collectors).
Minting of a one trillion dollar coin is being considered by The Treasury, bypassing the collectors market and depositing it with the Federal Reserve so the Treasury can continue to pay bills after the debt ceiling has been reached. Theoretically they could mint a regular size coin with just 1 ounce of platinum but with a face value of one trillion dollars. The Treasury is not allowed to print more money to pay the nations debts because that just causes a further increase in inflation. This loophole in the law could allow the Treasury to do exactly that which will just cause further problems with our economy.
The Government has been recklessly printing Dollars for many years now which only dilutes the value of the money in your pocket. Every time they roll the printing press your existing dollars become worth less. This is just another hidden tax.
Several economies have been completely destroyed when reckless governments have used the printing press to pay debts which they cannot afford. It is similar to having a whole bunch of credit cards and continually using one card to pay off the next until one day you are all maxed out. Our government has been doing this for a long time and they are already maxed out but instead of fixing the problem they are still looking for yet another Band-Aid.
Paper money NOT backed by gold or silver is unconstitutional. Article 1, sections 8 & 10 of the constitution clearly states that “No state shall make anything except gold and silver coins for paying debt unless it is backed by gold or silver”. The reason for this is to avoid inflation. If the Government prints Dollars which are not backed by gold then those dollars are worthless so when they are put into circulation they automatically reduce the value of all of your existing dollars by diluting their value. The result is higher prices for you on everything you spend, also known as inflation.
Germany printed billions of Deutsch Marks after the end of the war to pay compensation to a number of countries. The result was a massive inflation increase causing prices to skyrocket. A loaf of bread or a pint of milk was costing Germans millions of Marks. Many people resorted to burning Deutsch Marks to stay warm because it was cheaper than paying fuel bills and the Marks was almost worthless.
The US Government has been printing Dollars not backed by gold for many years now which has been causing a gradual dilution of its value. Over the last 100 years the value of the US Dollar has decreased by 97% according to the US Bureau Of Labor Statistics. If they continue down this path your dollars will not even be worth the paper they are printed on. This is the main reason why so many people prefer to invest in gold which has been increasing in value every year rather than leave their money in paper dollars which are dramatically reducing in value.
In 1971 if you had invested $35 in 1 oz of gold it would be worth $1,700 today which is an increase of almost 5,000%. If you had kept that same $35 in cash paper money it would still be worth just $35 but now it will only buy you less than one tenth of what it would have bought in 1971. Therefore, your $35 in paper money has reduced in value by more than 90%.