There is a new idea racing through the chattering classes for how President Obama could avoid the debt ceiling. It’s simple: He instructs the Treasury to mint a $1 trillion coin made of platinum that is then sent to the Federal Reserve. The Fed, in turn, credits the Treasury with $1 trillion and the Treasury, its coffers replenished, then goes on its merry way writing checks.
Is it legal? Well, yes, in the narrowest sense. Section (k) of 31 USC § 5112 says that:
The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
Of course, there is one small problem: Platinum is currently selling for about $1,590 a troy ounce. So a $1 trillion coin would weigh 26,221 “troy tons,” which might present a bit of a transportation problem getting from the mint to the Federal Reserve. There is also the problem that nowhere near that much platinum has ever been mined since the metal first came to the attention of chemists in the 1740s. Last year a grand total of 211 tons was mined worldwide, almost all of it from South Africa, Russia, and Canada.