Trillion dollar coin could be minted within hours of emergency decision, former US Mint chief says

• The US Mint can manufacture a $ 1,000 billion coin within hours of an emergency decision, a former executive said.

• “This could be quickly performed on the existing plaster mold of the Platinum Eagle,” he said.

• While it is possible, the Treasury Secretary dismissed the idea of ​​such a coin in an interview with CNBC.

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A $ 1,000 billion coin could be minted within hours of an emergency decision by Treasury Secretary Janet Yellen to avoid a default on US debts.

Philip Diehl, director of the US Mint from 1994 to 2000, told Axios that the agency has no shortage of platinum coin blanks. This is the metal required to make such a part, according to the law on which the whole idea is based.

“This could be quickly executed on the existing plaster mold of the Platinum Eagle,” said Diehl, adding that only the denomination of the part would need to be changed.

After that, the $ 1,000 billion coin could be minted in minutes in West Point, New York, and airlifted to the New York Fed for physical depot by helicopter.

How quickly a $ 1 trillion coin can be created could be an extreme last-minute option if Congress fails to raise the debt ceiling before the Treasury runs out of money on October 18.

But as Treasury Secretary Janet Yellen urges Congress to raise the debt ceiling to avert economic catastrophe, she also rejects the idea of ​​the $ 1,000 billion coin.

In an interview with CNBC on Tuesday, Yellen said of the piece: “I oppose it and I don’t think we should seriously consider it. It really is a gimmick, and what is needed, c is that Congress shows that the world can count on America to pay its debts. “

A vote is scheduled for Wednesday to suspend the debt ceiling until the end of next year, but opposition from Senate Republicans gives the measure little chance to pass.

There would probably be many downsides to materializing a $ 1,000 billion coin. It could undermine confidence in the U.S. monetary system and drag the Federal Reserve into a high-stakes political battle, Jason Furman, a former economist in the Obama administration, told Insider last month.

The story continues

But the “gimmick” piece would effectively give the Treasury Department the funds it needs to pay its debts and avoid an almost guaranteed economic recession in the event that Congress fails to act and raise the debt ceiling on time.

“Voila, we would have bought ourselves the equivalent of a trillion dollar increase in the debt limit, with no impact on inflation,” Diehl said.

Read the original article on Business Insider