Friday, January 11, 2013
Will the US mint a $1,000,000,000 platinum coin in an attempt to alleviate continued debt ceiling crisis that continues to peek out from under the carpets of the US congress?
Following last minute talks between President Obama’s Democratic Party and the republicans on New Year’s Eve, some democrats have proposed a plan to mint a one trillion dollar platinum coin to ease pressure to-close-for-comfort debt ceiling limit.
Sounding more like the storey line to an episode of the Simpsons or a jackpot headline in a Las Vegas Casino, the move has produced a stern and immediate response from Republicans, with a bill already in progress to block the ‘minting’ of such ‘coin’. Conceded as a gimmick by most democrats and Republicans alike, the move exploits a loophole that is essentially quantitative easing without the flow of cash out into the wider economy, the coin would simply be moved to the Federal Reserve as a sale of asset with the proceeds – a trillion dollars – being added to the US treasury bottom line.
Should the US Fed actually move to produce a physical version of the coin, just how much would a trillion dollar platinum coin weight if it were to represent a true metal content value? Based on the current platinum price of $51,151.83 per kilogram (Wednesday 9th January 2013 @ 17:00) the coin would weigh a total of 19.4 metric tons or 623,734 troy ounces! That’s no small change!
If you feel the latest round of US economic calamity can only be good for the gold price throughout 2013 then our Gold Britannia coins, both VAT and Capital Gains tax free could be the perfect investment to hedge against the continued uncertainties in Uncle Sam’s wallet!