Activist Post
I’m thrilled that the trillion dollar coin idea is being taken seriously by the establishment. Not because I think it is a viable solution to the national debt, necessarily, but because it shows just how close our monetary system is to reform.
First, for those not familiar with the trillion dollar coin; the idea is that the U.S. Treasury can coin any monetary value they want for whatever purpose they choose.
In this case the idea has been floated to Obama to avert the mandatory raising of the debt ceiling by coining a trillion dollar coin. In other words, Obama can use the coin to pay off a trillion in debt to allow an increase in federal spending without Congress’ approval.
Some economists argue that it is essentially creating more money out of thin air and thus will cause inflation. Other economists claim that since no new money is being put into circulation, no inflation will result. So who’s right?
They’re both right to a certain degree. Inflation occurs when there’s an expansion in the supply of money. The two best examples of how this works are the housing bubble and the college tuition bubble (and soon-to-be healthcare bubble).
In both these cases unnatural (not free market) amounts of money were injected directly into those sectors of the economy and the result was massive inflation. Put another way, there was a rapid expansion in the supply of money to those industries.
Continue Reading at ..... http://www.activistpost.com/2013/01/trillion-dollar-coin-reveals-monetary.html
Thanks to Jim Costa!
http://www.resetus.us/
