The Biggest Myth About The Platinum Coin Option

A blog about business and economics.
Jan. 9 2013 10:46 AM

The Biggest Myth About The Platinum Coin Option

The biggest and weirdest myth out there about the $1 trillion platinum coin is the idea that it would require a large quantity of platinum to make one. The National Republican Campaign Committee, for example, 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. Nobdoy would be able to fit them into their wallets. But just like if you want to write a check for a large sum of money you don't need to get one of those giant novelty checks, if the Treasury Secretary wants to mint a large denomination platinum coin he doesn't need to make the coin physically large. Just for the sake of showmanship, I would probably advice that we make it pretty big but the metallic content of a coin is entirely irrelevant to its monetary value and has been for a long time. Even under the gold standard the value of coins was a pure legal convention.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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