Coin Of The Realm
One of the ways that an individual can acquire precious metals is by buying the bullion coins of national mints. The US Mint produces bullion coins for silver, gold, palladium, and platinum. If you go to the Mint’s website for the one ounce platinum coin you will see this:
All American Eagles are legal tender coins, with their face value imprinted in U.S. dollars. Although their face value is largely symbolic, it provides proof of their authenticity as official U.S. coinage. The one-ounce platinum coin displays the highest face value ($100) ever to appear on a U.S. coin.
Given that an ounce of platinum is currently selling for over $1600, it should be obvious that the amount imprinted has no connection to the value of the metal used. If you tried to use one of these coins to pay your taxes, you would only get $100 for it, not the value of the metal.
That small paragraph establishes two important facts: the value of the metal and the amount on the coin are not connected, and the coin is “legal tender”.
Digby reads the New York Times and reports that the White House is telling Krugman that they are refusing to mint the coin “as a way to put the onus for avoiding default entirely on the GOP.”
Mattbastard at the Agonist notes that Kevin Drum is happy with Zero dumping the coin, but if the White House thinks that the Republicans are going to get all of the blame, they should read Athenæ.
If the coin is minted and has $1,000,000,000,000 stamped on it, it is legal tender and the Fed has to accept it at face value.
This move has made the debt limit, and possible shut down of the government, a petty political battle on both sides. No one seems willing to act like an adult and solve problems when they can have an artificial crisis that will screw up the lives of a lot people who don’t need any more stress.