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Friday, January 4, 2013
Randy Wray — Does Obama Have A Platinum Coin Up His Sleeve?
Platinum coin, Treasury warrants, and other interesting stuff.
It seems we have come to the "debunking" phase of the platinum coin discussion. The big media will now require "extraordinary proof" for what they framing as an "extraordinary claim." One could liken it to the "and then they fight you" stage in Gandhi's famous encapsulation.
From what I can see, the case for the platinum coin is pretty good. Maybe not airtight, but good enough for politics, at any rate. A good lawyer could make a strong case, I think. But let's be real here. The government can do just about any damn thing it wants to. How often have we seen legal justifications devised on a much more flimsy legal basis than exists for "the coin?" How often have we seen the illegal made legal retroactively?
As Rodger Mitchell said at Wray's place the whole coin discussion is at the very least valuable to introduce the public to the question of the monetary power itself.
Quote: But for what it's worth, the guy who was in charge of the U.S. Mint when the original law providing for the minting of such a coin was passed told me he thinks Nadler's proposal is perfectly legal.
"My understanding of how this all works suggests that this is a viable alternative," said Philip Diehl, a former chief of staff to the late Texas congressman Lloyd Bentsen, who was head of the U.S. Mint from 1994-2000.
Diehl tried to make the Mint function more like a business, and saw an opportunity in the worldwide market for platinum bullion coins. (The gold bullion coins fashioned by the Mint are not produced at the preferred purity for the worldwide gold trade, Diehl said, making them a tough sell on the international market.)
Diehl planned to conduct extensive market research, focusing in particular on the hot market for platinum in Japan, and wanted legislation that would allow him to react quickly to those results. The Treasury Department, wary of its bureaus making their own friends on the Hill, was "decidedly unenthusiastic" about the legislation, Diehl said, but he worked closely with Republican Rep. Mike Castle, who was chairman of the House Financial Services Subcommittee at the time, and eventually got the bill through the Republican-controlled House with what Diehl called a "blank check."
"One of the ironies in this story is that a G.O.P. Congress passed the legislation over the objections of a Democratic Treasury, and now, today, Treasury may well be in a position to use the law as leverage to neutralize the G.O.P.'s threat to hold the debt limit hostage," he said.
The legislation served its purpose; the Mint rushed out a platinum bullion eagle coin—in denominations up to $100—and overtook the market.
"We brought that coin to market faster than any coin the U.S. Mint had ever brought to market, and within about six months of launching it, we owned about 80 percent of the worldwide market for platinum bullion coins," he said. "The Canadians had dominated the Japanese and U.S. market up to that time, and we basically took them out of his both markets."
"Of course, no one ever imagined that a scenario like this would develop," said Diehl, who is now C.E.O. of a gold seller in Austin, Texas.
Diehl said he thought it could be used "as a backstop," and that it appeared to be on more firm legal ground than the 14th Amendment.
It seems we have come to the "debunking" phase of the platinum coin discussion. The big media will now require "extraordinary proof" for what they framing as an "extraordinary claim." One could liken it to the "and then they fight you" stage in Gandhi's famous encapsulation.
ReplyDeleteFrom what I can see, the case for the platinum coin is pretty good. Maybe not airtight, but good enough for politics, at any rate. A good lawyer could make a strong case, I think. But let's be real here. The government can do just about any damn thing it wants to. How often have we seen legal justifications devised on a much more flimsy legal basis than exists for "the coin?" How often have we seen the illegal made legal retroactively?
As Rodger Mitchell said at Wray's place the whole coin discussion is at the very least valuable to introduce the public to the question of the monetary power itself.
David,
ReplyDeleteDid you see what the architect of the Platinum Coin Act had to say?
From A trillion-dollar-coin idea takes off, and a former head of the U.S. Mint doesn't see why it shouldn't
Quote:
But for what it's worth, the guy who was in charge of the U.S. Mint when the original law providing for the minting of such a coin was passed told me he thinks Nadler's proposal is perfectly legal.
"My understanding of how this all works suggests that this is a viable alternative," said Philip Diehl, a former chief of staff to the late Texas congressman Lloyd Bentsen, who was head of the U.S. Mint from 1994-2000.
Diehl tried to make the Mint function more like a business, and saw an opportunity in the worldwide market for platinum bullion coins. (The gold bullion coins fashioned by the Mint are not produced at the preferred purity for the worldwide gold trade, Diehl said, making them a tough sell on the international market.)
Diehl planned to conduct extensive market research, focusing in particular on the hot market for platinum in Japan, and wanted legislation that would allow him to react quickly to those results. The Treasury Department, wary of its bureaus making their own friends on the Hill, was "decidedly unenthusiastic" about the legislation, Diehl said, but he worked closely with Republican Rep. Mike Castle, who was chairman of the House Financial Services Subcommittee at the time, and eventually got the bill through the Republican-controlled House with what Diehl called a "blank check."
"One of the ironies in this story is that a G.O.P. Congress passed the legislation over the objections of a Democratic Treasury, and now, today, Treasury may well be in a position to use the law as leverage to neutralize the G.O.P.'s threat to hold the debt limit hostage," he said.
The legislation served its purpose; the Mint rushed out a platinum bullion eagle coin—in denominations up to $100—and overtook the market.
"We brought that coin to market faster than any coin the U.S. Mint had ever brought to market, and within about six months of launching it, we owned about 80 percent of the worldwide market for platinum bullion coins," he said. "The Canadians had dominated the Japanese and U.S. market up to that time, and we basically took them out of his both markets."
"Of course, no one ever imagined that a scenario like this would develop," said Diehl, who is now C.E.O. of a gold seller in Austin, Texas.
Diehl said he thought it could be used "as a backstop," and that it appeared to be on more firm legal ground than the 14th Amendment.