Thursday, January 10, 2013

Trillion Dollar Coin Reveals the Monetary System in Death Throes

Eric Blair
Activist Post

I’m thrilled that the trillion dollar coin idea is being taken seriously by the establishment. Not because I think it is a viable solution to the national debt, necessarily, but because it shows just how close our monetary system is to reform.

First, for those not familiar with the trillion dollar coin; the idea is that the U.S. Treasury can coin any monetary value they want for whatever purpose they choose.

In this case the idea has been floated to Obama to avert the mandatory raising of the debt ceiling by coining a trillion dollar coin. In other words, Obama can use the coin to pay off a trillion in debt to allow an increase in federal spending without Congress’ approval.

Some economists argue that it is essentially creating more money out of thin air and thus will cause inflation. Other economists claim that since no new money is being put into circulation, no inflation will result. So who’s right?

They’re both right to a certain degree. Inflation occurs when there’s an expansion in the supply of money. The two best examples of how this works are the housing bubble and the college tuition bubble (and soon-to-be healthcare bubble).

In both these cases unnatural (not free market) amounts of money were injected directly into those sectors of the economy and the result was massive inflation. Put another way, there was a rapid expansion in the supply of money to those industries.

Housing Bubble: With restrictions loosened on the banks and the government guaranteeing loans, incredible amounts of easy subprime money flooded the real estate market in the mid-1990s resulting in an unprecedented increase in property prices until the bubble popped in 2007.

College Tuition Bubble: Since the US government took over student loans from the free market and made them readily available to any warm body who desired to go to college, the price of tuition exploded compared to the general rate of inflation due to new but previously nonexistent “demand”.

But, you may ask, the Fed has been printing incredible amounts of money including trillions in bailouts, so why haven’t we seen runaway inflation in the overall economy?

New 1oz Silver Coin
The answer is that that money never reached the real economy. It was just absorbed by toxic paper and used to scrub the books at the banks. Sure, some of that money crept into the economy (mostly in the form of banker bonuses) and some inflation has occurred from the bailouts.

This is the concept behind why the trillion dollar coin will not cause inflation; because it will simply be absorbed by the government’s toxic debt and not enter the real economy. However, the purpose of the coin is to allow the government to increase spending by a larger margin than they previously would be permitted, thus eventually resulting in inflation when that new money is spent.

In summary, bailouts of debt do not cause inflation by themselves; spending of new money into the real economy causes inflation. That is why they can’t directly bailout the people without causing massive inflation.

Supporters of big government spending like Paul Krugman hail the coin as a creative way to “solve” the debt ceiling problem. Meanwhile, deficit and inflation hawks call the idea stupid and point to inflation.

Interestingly, during the last debt ceiling debate, leading inflation hawk Ron Paul proposed a similarly creative solution that received far less attention. Paul suggested that the Federal Reserve just write off their nearly $2-trillion part of the national debt that they hold. Paul stated that since the Fed is our central bank we essentially owe the money to ourselves.

Funny, I don’t remember any Austrian economists calling Paul’s idea stupid even though it accomplished the exact same thing that the trillion dollar coin does. In truth Paul’s idea was more about revealing the Ponzi nature of the monetary system and the true nature of the Fed than as an actual solution.

Both cases of the coin or a Fed write-off reveal the fraudulent nature of the so-called debt crisis or even the urgency in having to raise taxes. If these tools exist, why do we need to pay taxes at all? That is an important question Michael Snyder addressed in a recent article.

The point is that our monetary system in relation to government spending is so broken that fringe ideas like the trillion dollar coin are actually being taken seriously. It represents a signpost of approaching monetary reform.

Yet the motivation is to allow even more government spending, which is in just as much need of reform as the monetary system. We can’t fix one without the other.

Most of all, the trillion dollar coin represents an opportunity for the public to learn how phony the entire system is; that crises aren’t really crises at all, and that austerity is unnecessary enslavement.

When that sinks in people may begin to wonder why the monetary system works the way it does and what it could be replaced with.

Read more articles by Eric Blair Here.



Anonymous said...

so america is openly cheating its debtors nations while for other thrid world and european countries it insists through IMf to fully pay their debt byselling assets at one percent fire sale.

Anonymous said...

If Americans can swallow the immoral argument for war on terror which led to the deaths of millions of Iraqis, how bad do you think they would feel about cheating their way out of debt? I'm thinking its an easy sell....

Anonymous said...

Two points.

First, the value of anything is only the price someone is willing to pay to own it. Is there anyone, anywhere who will pay a trillion dollars to own this coin? I'll give you $100 for it right now if the government agrees not to make more and thus reduce the coin's uniqueness.

Second, why do you have to actually mint a fake coin? Couldn't we just pretend it exists by making something with Photoshop? Where does it say that a fake coin must actually physically exist to be considered a REAL fake coin?

Anonymous said...

I agree, a different money system is a good idea. Only problem is we have a mafia government without the rule of law. That makes any different money system still a bad idea until we return to having a government with the rule of law.

Illustrating that a better money system exists is only useful in showing how the one we have was designed to produce debt slavery. Instituting a new money system will not fix things by itself, and we best remember that.

Anonymous said...

I would like to try to answer anon 6:46 2nd question, "Because when people see something "tangible" and then are told that what it is, they will actually believe it. If the gov says this coin is worth a trillion, most sheeple will believe it. It is really no different than when the fed res says a "dollar" is a dollar... A dollar has been defined as a certain amount of "gold or silver" and this dollar is what is to be used for trade. Obviously what we have today is not a dollar, not even close, but people actually think it is because they have been told that. I know you know all of this. Not just our so called money today, but most of everything people think is "reality" today, is far from reality. Most of our humanly world today is just a grand illusion that is made to look real, and there are a whole bunch of people to believe it to be true.

Anonymous said...

Why not just int a trillion dollar bill?(cheaper too) It worked for Zimbabwe. It worked so well they issued $100T notes. Zimbabwe has more trillionaires than any country in the galaxcy.

Anonymous said...

This just shows how fake and dangerous any monetary system is. In my view, the only sustainable solution to the monetary system is a global resource-based economy.

Technology is advancing at such a pace now that the number of jobs displaced by it far outnumber the ones that are being created. Some sources predict that by 2030, 5% of the global population will be able (with the help of automation) to provide for all the world's needs.

Jobs are unsustainable. We need to stop thinking that everyone needs to "earn a living", and start looking at more universal solutions. Creating an abundance of everything at the highest possible standard of quality is the way to go if we are to be truly 'free'.

Brendan R

Anonymous said...

"First, the value of anything is only the price someone is willing to pay to own it. Is there anyone, anywhere who will pay a trillion dollars to own this coin? I'll give you $100 for it right now if the government agrees not to make more and thus reduce the coin's uniqueness."

While that is true in principle the reality is that if made from 1 ounce of .999% platinum as claimed then it will have a "set value" as platinum is one of the most valuable alloys in the world today.

I believe right now platinum is trading at around $1,600 per ounce($1,623 right at this moment), though it fluctuates every hour of every day as all market values do.


So you'd have to pay a lot more than $100 for such a coin since there is much higher market demand than that already.

But even at $50,000/oz it would be a far cry from being a $1,000,000,000,000 coin.


Anonymous said...

This pisses me off. They are laughing at us. No one ever brings up debt forgiveness, but some asshole gets to walk around with a trillion dollar coin in his pocket. Bastards.

Anonymous said...

Wow. That's an incredible idea. For those that think this is a good idea, please answer this. Why the FRACK (BSG) are any of us paying taxes???

Anonymous said...

This idea is a phony as Obama Hussain being the leader of the free world. If he's even American, he's a traitor.

Anonymous said...

The President does not spend, nor can he alter the budget approved by Congress, originating in the House, currently under Republican control.

Section 8. Clause 1. The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States..."

Nixon refused to spend money authorized by Congress and this is what happened:

" When newly-elected President Richard Nixon began to refuse to spend funds that the Congress had allocated, Congress adopted a more formal means by which to challenge him. The Congressional Budget Act of 1974 created the Congressional Budget Office (CBO) and directed more control of the budget to it and away from the President's Office of Management and Budget (OMB)."

Whatever the President proposes has no power unless it is approved by Congress. Ultimately,spending and spending cuts are ruled by Congress, with the President limited to making proposals but with no power to authorize his proposals.

It is wrong to say the President spends or cuts spending; that is the job of Congress.

Now if Congress spends, can it refuse to pay for the programs it has authorized?

The Constitution, in the 14th Amendment, says NO!
In the wake of the Civil War, the 14th Amendment was passed in 1868 (and has not been repealed). Here is the text of Section 4:

"Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

Shall not be questioned: in other words, it must be paid. There is no option to refuse to raise the debt ceiling for funds already authorized to be spent by Congress.

If people would read the Constitution they would realize that the "debt ceiling crisis" is fake political posturing, which in fact violates the Constitution. The President does not need anyone's approval to pay US debt, incurred by spending authorized by Congress. He is required, by the 14th Amendment, to pay all US debt without question or debate.

Understanding the Constitution would alleviate much of the phony theatrics of those who pretend they have the power to oppose or question paying the debt. In so doing, they violate the Constitution. If Congress does not want to pay for spending it authorizes, it should not vote to spend it. Blaming the President is a fraud intended to divert attention from their own betrayal of the oath they take to defend the Constitution.

If you vote to spend, you have, per the
Constitution, an absolute commitment to pay any debt incurred in raising the funds to be spend.
Those who question the debt should be impeached for violating their oath. If you use the credit card to fund your wars, your tax cuts for the rich, your subsidies to corporations you are required by the Constitution to pay for it, no ifs ands or buts.

Remember that when you read the bull that will be uttered and written in the next few months about the fake "debt ceiling crisis." If you don't want to pay for it, don't spend it. Case closed.

Anonymous said...


Rabbitnexus said...

Anonymous said...

Why not just int a trillion dollar bill?(cheaper too) It worked for Zimbabwe. It worked so well they issued $100T notes. Zimbabwe has more trillionaires than any country in the galaxcy.
January 10, 2013 8:58 AM

---Because the government may not print notes, only coins.---

Anonymous said...

I want a plutonium coin just like that one to pay off some toxic debts.

Anonymous said...

This is Obama saying F#@k off to the Fed and here's a penny for your trouble...

Anonymous said...

Primarily inflation occurs when money is created and loaned into circulation as debt, at interest under the fractunal reserve banking system.

The central bank regulates the volume of the currency, M-1 M-2 M-3 of the money supply and the velocity of the currency, the number of moves of the currency of the same denomination equals amount of money serving as circulating medium by expansion and contracton of credit.

The only solution to the national debt crisis is revaluation of the currency. Pass a revaluation bill limiting paper currency debts to 1% of their gold dollar value of $2,000 an ounce reevaluating the currency and issuing new currency at a 100-1 exchange rate, pro-rating all prices, incomes, debts, and charging a 10% exchange rate fee to pay down the legitimate debt, cancelling all debts held by the Federal Reserve and adding a provision for debt foregiveness. All other debts can be assumed by the U.S. Treasury.

By reevaluting the currency the debt is more viable to service.

All these problems are a symptom of an underlining cause. If congress does not balance the budget, all these measures are of no avail. There must be a combination of spending cuts and raising taxes. What ever happen to the balance budget ammendment?

Anonymous said...

sounds like a great idea. then when they try to spend the trillion dollar coin, just point to the sign that says 'we don't accept anything larger than a 20 dollar bill'

Anonymous said...

"Now we got money
Obama money
Yeah we’re printin’ it in the basement just as fast as we can.
We’re makin’ money
Obama money
Yeah we’re livin’ the Obama budget plan."

Carlik Washington said...

I understand the premise of what this article is saying. The Austrians can only guess as to the imminence of a collapse, but the principles of their theory is spot on. Its not an economic fact that the government can simply print money endlessly. If that were the case, job creation would be unnecessary, presidents could print money, say 100k per person per year, send it to every American, and allow them to import 100% of their goods & services. Whats happening is that we are keeping the world convinced of our productivity and solvency. If that perception is lost, our economy can be destroyed if foreign investment leaves, and exported goods become more and more expensive. The US created an economic powerhouse during the last two centuries so we can expect for it to take time for it to "unravel" If we keep doing what were doing it will, but I would be surprised if we let it get as bad as it truly can get.

Anonymous said...

From previous poster: Some sources predict that by 2030, 5% of the global population will be able (with the help of automation) to provide for all the world's needs.

Is there any other way to straighten things out than to have labor issue the bourse?

Strike them out! Take the bourse into your control labor. Put the stipend in with something for everyone.

Hide Behind said...

The most likely scenario is a two currency system; one for domestic use and almost fully seperated fom our foreign sovereignty coinage.
To keep it stable all gold silver precious metals either outlawed or kept tightly controlled and DOMESTIC CURRENCY WORTH ABSOLUTE ZERO OUTSIDE OF ITS BORDER.

Anonymous said...

What inflation REALLY is, is a decrease in the perceived purchasing power of a fiat currency. When someone thinks that the fiat currency in their pocket or bank accounts (made up out of thin air and its acceptance enforced via guns, bombs and jails) will not buy as much today as it did yesterday, then more will be asked for in order to maintain the same standard of living as was had the day before. That's ALL that you need to know to understand what inflation is, what causes it, and how to avoid it. When the medium of exchange of choice (gold and silver) is used, there is no inflation because those elements cannot be created by men in laboratories or out of thin air. Read The Credit River Decision for proof of this.

Manuuuh said...

No trillion $ coin will make any difference.`

“Hold onto the Constitution and to the Republic for which it stands…for if the
American Constitution should fail, there will be anarchy throughout the world."
Daniel Webster

“It does not require a majority to prevail, but rather an irate, tireless
minority keen to set brush fires in people's minds”
-Sam Adams

Anonymous said...

On October 31, 2003, while Americans walked their children trick or treating, the CBS Evening News report went unwatched. Dan Rather reported that the FDA had decided clone milk and meat was safe for consumption. This Halloween night satan and the nwo played one of the final tricks ever on humanity and God's creation.The grevious mistakes already made by animal cloning and the effects on those who eat clone meat is a ticking timebomb. While scientists race to create a CJD resistant vaccine for cloned milk and meat, the prions we have already eaten lay dorment waiting to attack the brain. There is no known cure for CJD,vCJD or BSE and these diseases will be fatal to consumers years after ingestion. These nazi eugenicists could achieve their goal of mass genocide ten or twenty years in the future and there be no smoking gun. They have known about BSE since 1996 and probably planned cloning to complete their plans. Top cloned bulls are used to breed normal cows and the strain on this DNA will assuredly cause new diseases. Only the coming Judgment can fix these wrongs.

This may not seem like a big deal to some but see what the nwo does to keep control of the food and what happened after the movie Food Inc. and this report.

Did you see the four horsemen statue behind the womans head and actually only three were in the shot? Bush, the first horseman, had already came. The hired nsa satanists killed Michael Jackson just days after this report. The poor soul had been like us and sleep deprived for months and was drugged to death right when a diversion was needed. Michael Jackson was mind controlled and dragged through the mud for years.

The suffering that all of us endure has led me to the book of Job many times. The 39th chapter details the wonder of Gods' creations from goats to ostriches and how only He can control the uncontrollable. God's power and wisdom as Creator and Preserver of the physical and animal world is absolute and will not be tampered with. The ancient pagans worshipped bulls and cows and the golden calf built by the nwo is an especially heinous sin. Their rejection of God's sovereignty over nature is a major cause for the Final Judgment.

"Look on every one who is proud and bring him low; and tread down the wicked in their place. Hide them in the dust together; and bind their faces in secret. Then will I confess thee that thine own right hand can save thee." Job 40:12-14

Job suffered more than I ever have and I take solace in reading how he endured. Any TI who doesn't know the Lord Jesus Christ just repent and make him Lord of your life and escape the wrath coming on all the world. The release of the burden of your sins and to miss the hour of trial and escape hell will make all we have endured worth it. The greatest comfort we all could have is the last point of the "Sermon on the Mount" :

"Blessed are ye, when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake. Rejoice and be exceedingly glad for great is your reward in heaven: for so persecuted they the prophets which were before you." Matthew 5:11-12

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