The US is “seriously” considering creating a $1 trillion platinum coin to write down part of its debt to stop the world’s largest economy defaulting as early as next month, according to financial analyst Cullen Roche.
“I know it’s been spoken about at the White House and a number of prominent people, including congressman [sic], are talking about it,” he said.
In theory the US Treasury would mint the coin and deposit it into its own account at the Federal Reserve, which would allow the government to write down or cancel $1 trillion of its $16.4 trillion debt pile.
The Treasury began shuffling funds in order to pay government bills after the country hit its $16 trillion debt limit on December 31. However, the Treasury’s accounting maneouvres will last only until around the end of February as the latest fiscal cliff deal gives US politicians two months to raise the debt limit before the country defaults.
The idea, which was raised last year, has been floated by several financial analysts in the States over recent days as Congress and the government approach the key fiscal vote.
Full article: US ‘seriously’ considering $1 trillion coin to pay off debt (The Telegraph)