Man, the Fed will buy anything!
Over the weekend there was much discussion surrounding Congresswoman Rashida Tlaib who proposed the issuance of two platinum coins, each one worth exactly $1 trillion. Wait what??
The $1 trillion coin was first hypothesized during Obama's response to the original financial crisis. And no, it doesn't mean that we mint a coin with $1 trillion worth of platinum because that would be ridiculous. A coin like that would need to be approximately 50 meters in diameter and 1 meter high.
The idea is that the US Treasury would mint a regular size coin and assign it the value of $1 trillion, then sell it to the Fed, would could then create the money out of thin air and give it to the Treasury.
See, for the most part the Fed can only lend money to the US Government. With this thought experiment, the loan would be a bit more permanent as the Fed get's to keep the coin and add it to it's long list of inflated assets.
Unfortunately, or fortunately, whatever the case may be, it doesn't seem like this plan is all too likely to happen. It would of course raise too many questions about how value is created and no doubt cause a bit of a political muss. Not that there isn't one already. In any case, it seems like the Fed has committed to buying something a bit more intangible today.... the market.
