The blockheadchain

You may wonder why the Democrats are so worried about increasing the debt ceiling since they need no GOP votes to do it. Are they embarrassed about their insistence that spending $3.5 trillion is costless?

Who knows?

The Dems do have a Plan B. There are some ifs:
If mining and refining an ounce of platinum doesn’t release so much CO2 that AOC will be brought to tears.
If Ilhan Omar and Rashida Tlaib don’t associate platinum with Joos.
And if Liz Warren isn’t afraid that platinum jewelry competes with Navaho silver workers.

The proposal is to mint a one trillion dollar platinum coin. Here’s an artist’s conception:

You’ll note it’s a bit composition challenged. Making the font smaller and shrinking the eagle would be even worse.

People wouldn’t understand ‘$1012‘.

The coin artists could always make the coin bigger, of course, so even a relative 4 point font would be legible. More on that later.

When I first became aware of this idea (it’s been mooted since the 2011 debt ceiling kerfuffle), I wondered if I should put my plans to acquire majority control of Apple on hold and just get a trillion dollar coin instead.

There turn out to issues with this. Even aside from the fact that Apple’s market cap has gone from $400 billion to $2 trillion since 2011, and that a 2011 trillion dollar coin would now only be worth $880 million after inflation.

Here are some of those other complications:

The US Mint is currently selling a 1 ounce proof platinum coin with a face value of $100 for $1,545; while, as I write, the market price for an ounce of platinum is around $980. That Mint premium is partly because of numismatic value, but arises mostly from the monopoly the Mint holds. What the market will bear.

At that Mint proof to spot price ratio, the trillion collar coin would cost $1.58 trillion.

For comparison, the Mint wants $2,690 for a 1 ounce gold proof coin when today’s spot price is around $1,760. So, a trillion dollars in gold, at market value, would be about $1.52 trillion if purchased from the Mint. This seems a better deal to me, but there’s a problem with that, too. The United States government does not possess a trillion dollars in gold.

The United States holds 261,498,926 ounces of gold, which it values at $42.222 per ounce (Go figure. They value trans pronouns higher than that.), or a little over $11 billion ($11,041,059,957).

To buy the entirety of US gold reserves at today’s spot (market) price would set you back almost $460 billion ($459,976,611,258). And even marking it up at the Mint’s level, say 150% assuming a volume discount, you only get to $690 billion. (As an aside, can you think of people who could leverage 51% of this? Bezos? Zuckerberg? Soros?)

Anyway, as the Dems figure these things, the United States could sell all its gold reserves and make up the other 30% phantom borrowing in increased taxes… at zero cost. All we have to do is convince the rest of the world we have a ‘trillion dollar’ coin.

One advantage of the trillion dollar proof platinum coin over the equivalent in bullion is that it would be much easier to store. But there’s still a $310 million premium over gold unless you count having to also buy Fort Knox to store the gold.

Counting against the platinum coin is that it probably would not retain its uniqueness for long. I think they won’t be able to stop with just one.

Also, we’ve had platinum coins for a long time and I don’t think they are glamorous enough to command such a premium. I do think some more exotic metal would help the price for the proposed coin. Palladium is out because the Mint already does that.

What about Iridium? The novelty would add value. And it’s in the $5,000 an ounce range. Still, maybe not enough.

For real novelty, something like roentgenium might do. Like platinum, it’s expected to be solid at room temperature. We’ve never had enough atoms to be sure. This would make minting a trillion dollar roentgenium coin as difficult as making change for it.

And… the US Mint personnel might raise an OSHA complaint. Roentgenium decays through spontaneous fission, and its most stable isotope, roentgenium-281, has a half-life of about 26 seconds. I’m not saying that the short half-life doesn’t have some advantage. Any coin that clips itself is a boon to the rate of inflation needed to ‘pay off’ our debt.

So, maybe some transuranium element that’s less deadly and with a longer duration – but still takes a lot of power to produce. For transuranium elements that power usage is “proof of work” (the Bitcoin value proposition) – on the order of millions of dollars per milligram. But opposite to Bitcoin, massive inflation would be built in.

A coin made from fermium-257 would have a half-life of less than 102 days. Mendelevium-256? 77 minutes. The material used would depend on the Fed need to inflate the national debt away.

Maybe the Treasury should create a trillion dollar Non-Fungible Token. A unique picture of the decay of a few roentgenium atoms in the cyclotron. The non-fungible bit might be a problem, however. Money has to be fungible, or it isn’t money.

Since the Dems don’t have my imagination, back to buying one of the trillion dollar coins. Again, I wonder, why stop at $1 trillion?

I think the paper solution is out because the Treasury is prohibited from emulating Zimbabwe. That’s what the debt ceiling means. For a discussion of why the Modern Monetary Theorists are saying the Mint should do it, see here. It discusses why the MMT theorists insist a $1 trillion coin would have to be a proof coin, not bullion. It’s still not legal, but it makes practical sense: Beyond the legal issues, platinum bullion coin(s) would cost a trillion dollars to mint, and would present a bigger storage problem than gold.

I’m thinking the US platinum trillion dollar coin is worth twice the current $985 spot price for a 1 Troy oz platinum ingot. It’s gotta be proof quality and it’s certainly a collectors item, so that adds 50%. And round up to the nearest thousand.

That would still be a smaller percentage premium (some number divided by zero) than I paid for my Zimbabwe $100 trillion dollar bill, and there supposedly is going to be actual platinum in the coin the Democrats are toying with. There’s been inflation since Zimbabwe’s effort, and my bill might be worth nominally more than I paid. I could hope that happens with the US effort.

A trillion dollar bullion platinum coin should sell at a steep discount for storage difficulties. That new coin would weigh around twice as much as all the US gold reserves, claimed to be around 8,000 tons.

A platinum bullion coin could be like several dozen of the largest Yap Island Rai stones. The Yap money has collectible value, here’s a small (40 pounder) for $14,000. That’s about $22 an ounce. The largest Rai stone weighs about 4.5 tons and is around 12 feet in diameter.

A trillion dollar bullion platinum coin would weigh… a lot more.

Maybe I should stick with the plan to acquire Apple.

Trump head fakes a veto

…decides swamp is a wetland.

Trump is signing an insane anti-budget delivered to him by a Congress of Fools.

Economically unhinged. Justified as funding the military, but an existential threat to the country.

$500 million for Planned Parenthood. NICS checks to be changed to keep some Seniors from owning guns. Continued funding of sanctuary cities. 25% of the Bill’s paper volume is dedicated to earmarks.

Democrats made me do it. Trust me, I won’t do it again.


Protection racket

I don’t remember where I found the link to the ThinkProgress post entitled Republicans Reject Obamacare ‘Fix’ Because It Includes Too Many Consumer Protections, and I am certainly not going to risk sending them any traffic by providing it here. Still, the hypocrisy should be noted for its humor. The post castigates House Republicans for rejecting a Democrat bill that allowed insurance companies to provide consumers with the plans Obama promised them they could keep.

The Democrat version differed from the bill the Republicans (along with 39 Democrats) did pass in that the Democrat version:

1- Did not allow new policyholders to buy the plans
2- Mandated that insurers notify policyholders of exchange options
3- Mandated that existing rate review processes apply to renewed plans

In other words, it put further burdens on insurance companies – making it unlikely they could even offer the plans in the new few weeks. Both “fixes” allow the plans to be sold and, therefore, equally violate consumer protection by offering the plans the Democrats call “substandard” “junk.”

There is a more humorous aspect, however. The consumer protection laws ThinkProgress finds so important absolutely prohibit false advertising and fraud. Those are crimes the President committed when he repeatedly lied about Obamacare. What consumers need is protection from the President.

The #SeekRenters

The sequester debate isn’t about spending cuts, it’s about a tiny slowing in the rate of increase of funds transferred to Federal rent seekers. Noted in the Wall Street Journal: The Unscary Sequester

In Mr. Obama’s first two years, while private businesses and households were spending less and deleveraging, federal domestic discretionary spending soared by 84% with some agencies doubling and tripling their budgets.

… from 2008-2013 federal discretionary spending has climbed to $1.062 trillion from $933 billion—an increase of 13.9%. Domestic programs grew by 16.6%, much faster than the 11.6% for national security.

Transportation funding alone climbed to $69.5 billion in 2010 with the stimulus from $10.7 billion in 2008, and in 2013 the budget is still $17.9 billion, or about 67% higher. Education spending more than doubled in Mr. Obama’s first two years and is up 18.6% to $68.1 billion from 2008-2013.

… total discretionary domestic spending is up closer to 30% from 2008-2013. The sequester would claw that back by all of about 5%.

… The sequester will surely require worker furloughs and cutbacks in certain nonpriority services. But most of those layoffs will happen in the Washington, D.C. area, the recession-free region that has boomed during the Obama era.

If Mr. Obama were really serious about improving the equality of income distribution, he might consider that a positive. According to Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, about

“…15 cents of every dollar from the entire federal procurement budget stays in or around the government’s hometown. …”We’re seeing an enormous transfer of wealth from taxpayers to the Washington economy,” said Fuller.”

Upton Sinclair was a socialist, but when he said, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it,” he was on to something; though he did neglect to mention the mendacity of politicians in fostering said ignorance. The threats issuing forth from the Obama administration – to prioritize cutting baby food and meat inspection rather than not funding the next Solyndra or ending high speed rail boondoggles; and putting slashing veterans benefits ahead of cancelling the DOD’s “green” projects – show a cynical disregard for taxpayers and reveal the deep hypocrisy of the president’s purported compassion.

Creative Accounting

Reuters reports “U.S. posts $3 billion budget surplus for January“. They fail to note that from December through January US debt rose by $137 billion.

This “surplus” is as if you counted a $500 per month raise as extra cash, while calling the $20,000 you borrowed and spend at the race track “long term debt.”

The Clown the Cop and the Clown

New York Times blogger Timothy Egan, in a post titled The Clown and the Cop, attempts to demonstrate why “Tea Party” types are ignoramuses whose priorities are fatally skewed because of addiction to FOX News. Instead, he demonstrates over-immersion in the Statist echo chamber, and reveals a general allergy to principle.

The first Clowns of the title are GSA employees who dropped nearly a million dollars on a party in Vegas. The Cop is the guy the GOP wants to “put on the street,” and not in an employed way. In between there’s mention of a $642 billion dollar defense appropriations bill (“$8 billion more than the Defense Department asked for.“).

These introductory themes are somewhat loosely coupled by Egan’s disdain and blind faith.

  • Disdain for the GOP’s hatred of public employees in general, and Mitt Romney’s deplorable views in particular.
  • Blind faith that Barack Obama is not responsible for anything that happens on his watch.

Oh, and there’s a slap or 3 for FOX News – really for anyone possessed of the temerity to disagree with the NYT narrative.

Egan: [M]ost people are unaware that the Republican majority, the same politicians who rode into office in 2010 (on a pledge of not spending beyond our means, voted to run up the deficit last month on behalf of those parochial projects.
The Republican majority?  Egan is apparently unaware that the Democrats control the Senate and the White House as he writes, and in 2010 also controlled the House, where they, like the Democrat Senate, were busy not passing budgets.

Egan: “[Obama] has been stymied by a Congress that wants to end his presidency by sabotaging the economy”
The Democrat majority Senate has a poor record in resisting this sabotage. It voted 0-0 for a budget in 2010 (no budget was considered in the Democrat House or Democrat Senate). The president’s proposed budgets were defeated in the Democrat Senate 97-0 (2011) and 99-0 (2012). The Democrat Senate has not performed their legal budgetary responsibility since April of 2009. 

The president has tried to kill the Keystone pipeline, encouraged the EPA to classify carbon dioxide as a pollutant (Obama’s stated plan was that electricity rates “would necessarily skyrocket”), conducted withering class warfare against job creators, wasted tens of billions picking “winners” like Solyndra, and made investors wary by demonstrating his willingness to ignore the rule of law: The 100% loss he decreed for GM and Chrysler bondholders, the shipment of firearms to criminals in another sovereign state and subsequent coverup, and suspension of immigration law in defiance of Article Two, Section 3, Clause 4 of the United States Constitution, to name but three.

Egan: “Obama is a relative miser on the [spending] growth chart”
Only because the baseline jumped so high with TARP – which the tea party opposed.  Obama, in 3 years, has run up a deficit – on top of TARP as a baseline – greater than the combined previous deficits since 1787.

Egan: on Romney “We have 145,000 more government workers under this president,” Romney said in Colorado last month. “Let’s send them back home and put you back to work.”

Again, this is simply not true.
There are, in fact, 145,000 more Federal government employees.  (You have to go to the 4th from last paragraph, that is an ABC report, after all. It’s amazing they even noted it.)

Those 145,000 are the ones under president Obama. Egan disingenuously counts local and state government employees, and though that’s on whom the vast majority of the stimulus money was spent, it is not what Mr. Romney was talking about.

And while I know “The private sector is doing fine,” Mr. Egan might further have noted that job losses run 11 to 1 against the private sector – 11 private sector jobs lost for every 1 government job lost, even when you consider those state and local employees.

Mr. Egan’s general ignorance of principle, however, is his largest failure. He does not know that the clown and the defense department are of equal importance, because it is not the amount of money that is the point.  It’s the venality on steroids, and in-your-face disrespect for the rule of law that are at issue for this administration. For example.

Analysis of our president’s address to a Joint Session of Congress

Anyone who opposes me… blah, blah… Democrat applause line… blah, blah… is a foolish, anti-American, baby eating Republican… blah, blah… applause line no one could disagree with if they believed he meant it… blah, blah… Democrat applause line… who deserves to be tarred and feathered because he hates teachers, old people and bridges… blah, blah… blah, blah… hundreds of billions… blah, blah… fiscally responsible, will be paid for… bleh, bleh… there’s an election in 14 months… blah, blah.

He does seem to have got his 2008 teleprompters back in service. They did a fine job.