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Fortunately, the idea of the U.S. Treasury minting a $1 trillion platinum coin has broken into the open.

Unfortunately, a lot of people seem bewildered by the outlandishness of the idea.

But most unfortunate of all, people do not realize what the real, HUGE issue of platinum coin seigniorage is: private banks' (ie, Wall Street's) monopoly over creating money. This is what the whole issue really comes down to: can we, as a sovereign nation, create our own money that is dedicated to the general welfare, or must we rely on bankers to create money only for private gain?

General welfare versus private gain. Which goal do you want your monetary system oriented toward?

Just like in the late 1870s to 1880s, when the Farmers Alliances were forced to recognize that local organizing of cooperatives alone could not beat back the sustained assault of financiers and bankers, unleashing the grass roots forces that created the populist movement of the 1880s, the combination of the financial crash, with the craven attempt by the rich to reduce their tax burden, has forced American citizens to begin considering the very nature of the financial and monetary systems. It's unfortunate that Armando mentions the platinum coin and links to an article that is so weak and so soft on the idea. Joe Firestone recently offered an outstanding intellectual history of the idea, which includes links to the very first substantial proposal for minting a $1 trillion platinum coin; the intense discussion and debate of platinum coin seigniorage at Warren Mosler's blog;  and what Firestone identifies as "the most comprehensive and rigorous discussion available of the relationship between"  coin seigniorage and inflation, by Scott Wiler.

From the very first substantial proposal for minting a $1 trillion platinum coin:

If you think about it, it does seem odd that the US Government is the monopoly supplier of US dollars and yet our politicians go through life thinking the government will run out of money unless it can borrow more.  Of course that’s not true, the coins in your pocket are legal tender and yet were not issued against debt.  They’re minted by the US Government, backed only by the gilt-edged credit of the American people, no one is paid interest on it and they don’t add a penny to the statutory debt.  What’s more, the use of coins as legal tender is scalable, they could replace the use of Tsy debt sales.  No, you wouldn’t have to carry more coins in your pocket.  Nothing would change except Tsy would be credited by the Federal Reserve for the sale of interest-free Treasury coins (presumably of large denominations) instead of interest-bearing Treasury bonds.

The two great powers of a sovereign state are the monopoly of violence and seigniorage, the profits from the creation of money.  If the federal deficit (that is, expenditures in excess of tax receipts) were funded by seigniorage revenue, not only would there be no debt service owed on the money, there’d actually be no deficit.

Joe Weisenthal at Business Insider understands this issue: Why The Fight Over The $1 Trillion Coin Is The Most Important Fiscal Policy Debate You'll Ever See In Your Life

And in 3 Huge Myths About The Trillion Dollar Coin Plan To Save The Economy, Weisenthal tackles the "big" objections: MYTH #1: This will cause massive hyperinflation; MYTH #2: The trillion dollar coin will destroy the dollar!, and MYTH #3: If this idea is so great, then minting a $16 trillion dollar coin could just solve our debt problem!

Drive a stke through the heart of the zombie vampire banksters! Mint the COIN!

Originally posted to NBBooks on Wed Jan 09, 2013 at 02:56 PM PST.

Also republished by Money and Public Purpose.

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