The $1 Trillion Dollar Coin and Other Bad Ideas that Actually Could Harm the United States

by: Doug Reed


There are a lot of people concerned about the financial status of the United States as of May 11th, 2023. As it stands, unless the debt ceiling is raised, the U.S. will default on its bills. That means you might not get your Social Security on time, lenders may quit lending for homes, banks – already in trouble, may not lend anything using SBA (government backed) loans and that is the proverbial tip of the iceberg.

One of the ideas floated earlier this year is the idea of of minting a One Trillion Dollar Coin. If this sounds like a crazy idea only fetched in ill run places like Zimbabwe, whose inflation rate currently is 284%, you’re wrong. As reported in the Wall Street Journal, it’s been seriously considered.

“Some Biden administration officials and Democrats on Capitol Hill have discussed the possibility that the Treasury could use an obscure law authorizing platinum coins in the event of a potential default. Under the proposed scheme, the Treasury would mint a $1 trillion coin and deposit it at the Fed, and then draw the money to pay the country’s bills.”

Treasury Secretary Janet Yellen said the Federal Reserve likely wouldn’t accept a $1 trillion platinum coin if the Biden administration tried to mint one to avoid breaching the debt limit, dismissing an idea that has been floated to circumvent Congress on the issue.

The idea of the one trillion dollar coin has become a popular topic of discussion in recent times. The concept has been proposed as a way to help the United States and the world out of its financial woes. While the idea is certainly intriguing, it is important to consider the potential effects of such a coin on inflation.

Inflation is a rise in prices over time, and it can be caused by a variety of factors. One of the most common causes of inflation is an increase in the money supply. This is what a one trillion dollar coin would do.

An increase in the money supply would lead to a decrease in the value of the dollar, as more dollars would be chasing the same amount of goods and services. This would cause prices of goods and services to rise, leading to higher inflation.

The effects of the one trillion dollar coin on inflation would be felt both in the United States and around the world.

The immediate effect of this would be spiraling inflation. Can you imagine going to the store to see the bread that was priced yesterday at $6.39 per loaf, which you thought was insane, is now $16.43! You go home thinking tomorrow will be better. You go back the next day, the bread is $24.13!

Your concern of someone else being insane turns to, “am I insane”? Then the shock turns to panic as you look around the store and see everyone buying everything off the shelf – at crazy prices – concerned that tomorrows price will be even that much higher….

In the United States, the coin would likely cause a spike in inflation, but in the long run, it might help to stabilize the economy.

The idea is that the coin could be used to help pay down the national debt, which would reduce the amount of money that the government has to borrow every year and potentially help to reduce interest rates.

On the global level, the one trillion dollar coin could also have an effect on inflation. By increasing the amount of money in circulation, it could cause prices to go up in other countries as well. This could have a ripple effect, as higher prices in one country could lead to higher prices in other countries. This could ultimately lead to another global inflationary spiral which the U.S. and Europe are currently fighting.

In the Spring on 2021, Former Treasury Secretary Larry Summers recently warned the Biden administration that its policies could stoke inflation.

Summers, who served in the Obama administration, said that the government’s massive spending plans, combined with the Federal Reserve’s money-printing and low interest rates, could lead to an unsustainable level of inflation.

Summers argued that the Biden administration’s policies, such as the American Rescue Plan, could lead to an inflation rate that is higher than the 2% target set by the Federal Reserve. He also warned that the government’s spending plans could be inflationary in the short term, but could lead to deflationary pressures in the long term.

Summers warned that the government should be careful to keep inflation in check, as rising prices can lead to economic hardship for individuals and businesses. He said that the government should focus on creating policies that will promote economic growth, rather than relying on inflationary measures.

Summers also noted that the Federal Reserve should be cautious when it comes to its money-printing and interest rate policies, as these policies could lead to a rapid increase in inflation.

He said that the Fed should focus on gradually increasing interest rates in order to reduce the risk of inflation.

The Federal Reserve and the Biden administration are now taking steps to try to stop inflation. The Federal Reserve is tapering its money-printing and is raising interest rates. This is intended to slow the growth of the money supply and to encourage saving, which should help to reduce inflation.

The Biden administration is also taking steps to reduce the government’s debt, including increasing taxes on wealthy individuals, corporations, and investors. This should help to reduce the government’s debt, which should in turn help to reduce inflation but will hamper growth.

These implications may further push China, Russia and other countries, some of which are adversaries of the U.S. as well as friends of the United States to further seriously consider other currency alternatives.

In recent decades, the U.S. dollar has been the world’s reserve currency, but that is quickly changing. Countries such as China, Russia, and other nations are looking to replace the U.S. dollar as the world’s reserve currency.

The U.S. dollar has long been the world’s reserve currency due to its stability, reliability, and global acceptance. It has been used to facilitate international trade and investment and to settle cross-border transactions.

However, the decline of the U.S. dollar’s dominance has been in the works for some time and a default by the United States or spiraling inflation due to failures in policy and economic considerations could hasten that move.

China, Russia, and other countries have been attempting to reduce their reliance on the U.S. dollar, and are instead looking to establish their own currencies as the world’s reserve currency.

China, for instance, is pushing for its currency, the yuan, to become an international currency. It has been gradually increasing its use in international trade, and is in the process of creating a yuan-denominated oil futures market. Russia, too, is looking to diversify its currency reserves away from the U.S. dollar. It is using its own currency, the ruble, in international trade, and is working to establish a ruble-denominated bond market.

The European Union is also looking to decrease its reliance on the U.S. dollar, and is pushing for its own currency, the euro, to be used in international trade.

Overall, a shift away from the U.S. dollar is underway.

Countries such as China, Russia, and the European Union are looking to establish their own currencies as the world’s reserve currency, and are gradually increasing their use in international trade. This shift could have major implications for the global economy, and it remains to be seen how the U.S. dollar will respond.

Ultimately, the one trillion dollar coin might have both positive and negative effects on inflation. It could be used to help the United States and the world out of its economic problems, but it could also lead to higher prices in the long run. It is important to consider the potential consequences before moving forward with the idea, especially as the once mighty U.S. dollar becomes loses strength internationally.

This is not a good time for bad ideas. The 1 trillion dollar coin is one of them!

By: Doug Reed