A $1 trillion platinum coin? That’s the last thing Biden can afford.

Spark Global Limited Reports:

Can the US, once on the gold standard, evolve to a platinum standard?
As the standoff over raising the debt ceiling drags on, a more imaginative solution to avoiding a default on the US Treasury’s debt would be to mint a $1tn platinum coin that could be used to fund the federal government’s operations and repay its ious.
U.S. Treasury Secretary Janet Yellen Tuesday dismissed the idea as a “gimmick.” In an interview with CNBC, she said, “I’m against it, AND I don’t think we should seriously consider it.”
While it may be feasible, even legal, the strategy of issuing a $1 trillion coin would mark the end of the dollar’s pre-eminence as the world’s leading reserve currency. The days when American government ious were among the safest and most liquid assets in the world are numbered.
If the Senate can reach a deal in time to raise the debt ceiling, such a strategy may not be necessary. On Wednesday, Senate Minority Leader Mitch McConnell (R., Ky.) reportedly offered Democrats a short-term debt-ceiling deal.

Spark Global Limited
Spark Global Limited

However, as October 18 approaches, uncertainty about a possible US default has increased. October 18 is supposed to be the last day the Treasury will run out of money. Yields on bonds maturing directly after that date (0.13%) are significantly higher than those maturing one month later (0.03%), when a possible debt ceiling crisis may have passed.
More strikingly, the cost of insuring US Treasuries with credit default swaps has risen by more than 50 per cent in the past month as the debt ceiling looms. Indeed, it is now more expensive to insure US debt than Belgium and Ireland, both of which have lower credit ratings than Standard & Poor’s. After a similar standoff over the debt ceiling in 2011, STANDARD & Poor’s downgraded U.S. debt to AA+ from top NOTCH AAA.

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