The Platinum Coin Doesn't Have to Be Physically Large

Moneybox
A blog about business and economics.
Oct. 14 2013 10:39 AM

The Platinum Coin Doesn't Have to Be Physically Large

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Platinum tiara works just as well.

Photo by Nicolas Asfouri/AFP/Getty Images

Reach into your pocket. Find a penny. Find a dime. Observe that the dime is worth 10 times as much as the penny and yet is physically smaller than the penny.

That, my friends, is the magic of fiat money. The size of the object is unrelated to its value. By the same token a $100 bill is physically the same size as a $1 bill. So when you hear about the idea of exploiting the platinum coin loophole by minting large-denomination platinum coins, don't imagine physically gigantic coins. Platinum is expensive! It would be enormously wasteful to finance the government with physically large coins. The idea would be to take more or less regular sized coins and write large numbers on them. That's just good sense. A physically enormous coin is silly.

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