Has anyone else lost faith in the "Paper Promise"?

[rbeau30]

EDIT #2: I have ZERO faith in the dollar. Your investments based in dollars (401k, IRA, etc) might grow over the years, but the buying power of those dollars will be SIGNIFICANTLY less when you retire. That said, I still have those types of investments specifically because my company matches a portion...

As do I now. More so than when I started this thread. With the rampant printing of money to pay debt, it is just a matter of time. And ohh don't forget the Treas Dept wanting to manufacture a Trillion dollar coin to pay the debt down?

[hollohas]

And ohh don't forget the Treas Dept wanting to manufacture a Trillion dollar coin to pay the debt down?

I still can't wrap my head around how that makes sense.

[centrarchidae]

I still can't wrap my head around how that makes sense.

It doesn't, really.

But here's the logic:

1) Congress has the power to "coin money."

2) Congress has authorized the Treasury to make platinum coins, in whatever denomination. The intent was to make novelties for coin collectors, but the coins will still be legal tender - at face (not metal) value.[1]

1 + 2 = 3) It's legal for the Treasury to make a one-ounce platinum coin and stamp it "One trillion dollars." Or, $1,600 in metal and $999.999,998.400 in seigneurage.[2]

4) The Treasury then deposits that coin at the Federal Reserve and writes checks or other disbursements against the trillion dollars that they suddenly have in their account.

Take away the smoke and mirrors, and it's the coin version of running the printing press.

[1] We already see this with pennies. They're "worth" a cent in face value, but actually have something like 1.4 cents' worth of zinc, each. They would literally be worth more, hammered flat and sold as scrap.

[2] Literally, means the right of a sovereign to profit from making coins. In context, it's a polite word for "inflation."