Why the Fed killed the $1 trillion platinum coin

No magic coin will save us from the coming debt-ceiling showdown

Sorry, trillion-dollar coin advocates: You're going to have to make do with the lowly $1 coin.
(Image credit: Chip Somodevilla/Getty Images)

The dream of a $1 trillion platinum coin is dead. "The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling," Ezra Klein reports in The Washington Post, citing Treasury spokesman Anthony Coley. And "if they did, the Federal Reserve would not accept it." From its humble May 2010 beginnings in the comments section of monetary policy blog The Center of the Universe to its embrace by financial bloggers Joe Weisenthal and Josh Barro, economist Paul Krugman, and former U.S. Mint director Philip Diehl, the idea of the platinum coin had become something of a media obsession, little loved but certainly entertaining — and deemed, at least in some liberal quarters, necessary to keep the U.S. solvent.

The platinum coin exploited a loophole in a 1997 law declaring that "the Secretary of the Treasury may mint and issue platinum coins in such quantity and of such variety as the Secretary determines to be appropriate," as long as it doesn't run afoul of "any other provision of law." The Obama administration refused to rule out the scheme last week, but wasn't enthusiastic about it. But "it was the Federal Reserve that killed the proposal," says Zeke Miller at BuzzFeed. The independent central bank refused to "buy into the gimmick" and "would not have credited the Treasury's accounts for the vast sum for depositing the coin," making it worth no more than the platinum used in its creation (or the amount it would fetch as a historical curiosity).

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Peter Weber, The Week US

Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.