Of all the cockamamie, hair-brained ideas, this one takes the cake.
So, anyway, I've been out of touch for the past two weeks. Not surprisingly, I missed this one. I had no idea that this was even being debated by those folks you might otherwise assume had some semblance of intelligence. What am I talking about? The Trillion Dollar Coin.
If, like me, you've been under a rock for the past few days and you have no idea what I'm talking about, here's a list of links for you to peruse:
Of course, there are some realists out there who have posted their dissent. Here's an example:
But, since the idea is, not surprisingly, being promoted by both President O'Bottom and Paul Krugman, this lunacy is unlikely to simply fade away.
Let me make this perfectly clear: THIS IS AN EXTRAORDINARILY BAD IDEA. It's one thing for The Fed to monetize the debt by printing money and buying treasuries. At least this method of funding the U.S. government has a tiny modicum of reality in that bonds are purchased which come with the future promise of repayment. The platinum coin idea is the outright creation of money from thin air. It is a true, immediate and real devaluation of the currency. Of course, some would say that devaluation and debt remediation are the only options for dealing with the current situation and, frankly, they're right. It's really the only way. The Fed must inflate in order to pay off yesterday's debts with the less valuable currency of tomorrow. However, to do it all in one swoop...to simply create $2T out of thin air...would be catastrophically inflationary. It would set off a full-blown flight from the dollar and from treasuries. The much-discussed hyperinflation and financial collapse would finally be upon us.
So, anyway, what's the point of this post? I don't know. Maybe it's just simply to let you know how desperate the situation has become. Maybe it's to point out to you, for future reference, just how completely clueless some in the financial media and politics truly are. Maybe it's just a reminder that you must continue to stack physical gold and silver, the only true and sound money, and the only financial protection you have against the madness.