Wednesday, January 09, 2013
Money's Still Money
Congress shall have the Power To...coin Money, regulate the Value thereof...
- US Constitution, Article I, Section 8
The National Republican Campaign Committee...is out there warning that "The amount of platinum needed to mint a coin worth $1 trillion would sink the Titanic."
This is total nonsense. If you wanted to mint a platinum coin worth $1 trillion then you would need to gather up $1 trillion worth of platinum and fabricate a coin out of it. But saying that the government would need a lot of platinum is like saying a $100 bill needs to have 100 times as much cotton in it as a $1 bill.
Consider the same section of the US Code that empowers the Treasury to mint platinum coins says it can also issue a "five dollar gold coin that is 16.5 millimeters in diameter, weighs 3.393 grams, and contains one-tenth troy ounce of fine gold." 5 dollars. While 1/10 troy oz is worth today...165 bucks and change. Weird that we don't see any of these in circ right now.
In other words, the value of the metals is completely dissociated from the value of the money. Money is an artifice, whether it's legal tender by fiat, based on precious substances or made from polished shells. Either the NRCC doesn't know that and is therefore incredibly ignorant of important things, demonstrating the GOP is not competent to actually govern, or it knows it and the GOP is therefore a bunch of liars who are not competent to actually govern. You know, the usual dichotomoy (or non-mutually-exclusive characteristics).
PS--The Coinage Act of 1792 established the Mint (I've been to the one in Philly with NToddsPa, which is right by the Free Quaker Meeting House we also visited). The Act specified various coinage denominations and compositions, and essentially established a standard, mathematical value of gold as 1oz = ~20 bucks.
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