Real Wealth #324 01/04/2013
Congressman Jerrold Nadler proposes a platinum coin solution to the debt ceiling!
Platinum Prices may be launched much higher if the United States winds up buying platinum for large scale minting of large denomination coins!
"There is specific statutory authority that says that the Federal Reserve can mint any non-gold or -silver coin in any denomination, so all you do is you tell the Federal Reserve to make a platinum coin for one trillion dollars, and then you deposit it in the Treasury account, and you pay your bills,"
--- Rep. Jerrold Nadler
By James DiGeorgia
According to Nadler the idea of minting large denomination platinum coins to avert a battle of the debt ceiling is “absolutely legal”. While doing this would be a first, according to Nadler “it may be necessary if the country is being faced with blackmail to destroy the country's economy.”
Sen. Pat Toomey (R-Pa.) said on MSNBC's "Morning Joe" yesterday, "we Republicans need to be willing to tolerate a temporary, partial government shutdown" in order to achieve spending cuts and entitlement reforms.
Today, Sen. John Cornyn (R-Texas), the second-ranking Senate Republican, wrote an op-ed making a similar argument...
“Republicans are more determined than ever to implement the spending cuts and structural entitlement reforms that are needed to secure the long-term fiscal integrity of our country.
The coming deadlines will be the next flashpoints in our ongoing fight to bring fiscal sanity to Washington. It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country, rather than plod along the path of Greece, Italy and Spain. President Obama needs to take note of this reality and put forward a plan to avoid it immediately.”
Cornyn isn’t clear in the op-ed was arguing for Republicans to avoid passing an additional continuing resolution (absent spending cuts), refuse to raise the debt ceiling, or both.
A spokeswoman for the Texas Republican asked for details by The Huffington Post that she didn't see a distinction between the two, with respect to whether or not the GOP should use them as leverage.
President Obama has pledged repeatedly that he will not to negotiate over the debt limit, which pays existing debts, and Nadler said last night's deal will be viewed through the prism of that promise.
According to Nadler if President Obama can somehow stick to his guns on the debt ceiling and sequester, "will be viewed as a major step forward economically, and in terms of social justice. If we do cave in two months from now, this won't look so good. I hope we won't cave in."
Nadler is conceding that it’s going to be "very difficult" to prevent, especially with Republicans already preparing for such a fight.
For example Republican senator Lindsey Graham, who advocated and voted "yes" on the vote on the fiscal cliff deal on Wednesday, told fellow Republicans to "save your powder” for another debt-ceiling fight, where the party was more likely to win concessions from the White House.
Nadler referred to this approach as an old-school racket.
"It's like in the old gangster movies: 'That's a nice economy you got over there, pity if it should happen to blow up—if you don't do what I want.' That's exactly what they're saying. That's exactly what Lindsey Graham is saying."
Nadler said minting a Trillion or Two Trillion high denomination trillion-dollar coins is one of two options to avoid the debt ceiling fight; another would be for the president to use his power under the Fourteenth Amendment, which says the validity of the public debt "shall not be questioned." Nadler tried to push the President to option for the later options during the last debt ceiling fight.
"It gets around this artificial debt-ceiling thing which has no economic justification," he said. "And, by the way, by the way, none of this has to be done. All the president would have to say is, 'I would do it if necessary.'"
If the President goes with the high denomination platinum coin option he could always order two $1 Trillion denomination coins struck. In that case platinum prices would not be pressured higher.
I’ll keep you posted o the platinum solution for the debt ceiling idea, if it goes anywhere.
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