Skip to main content

View Diary: Would Congress and the President Try to Cut Federal Spending If . . .? (29 comments)

Comment Preferences

  •  But Fed can get rid of the bonds it currently (0+ / 0-)

    has on the books without any coins whatsoever. Same goes for QE3-4. Use of platinum coins in this context simply serves to skirt the law preventing lending by Fed to Treasury.

    •  No it can't (1+ / 0-)
      Recommended by:

      The bonds were bought by the New York Fed, most likely, and that regional Fed Bank is privately owned, so it cannot just get rid of the bonds by destroying them since that would effect the assets of the Bank.

      Also, use of platinum coins doesn't skirt the law. Minting those coins is perfectly legal, and they are legal tender, so when they are deposited at any Fed bank, the deposit must be credited by the bank. The Treasury profits from this seigniorage are legally classified as miscellaneous receipts, revenue, not debt. So, the Fed is not lending to the Treasury in this operation, in any way, shape, or form.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site