This Is How They Could Literally Mint a Trillion Dollar Coin

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Unfortunately, my colleague Tracy Alloway is off today, and I say it's unfortunate because A, it's always unfortunate when she's off, but B, today we are going to be speaking about her favorite topic, which is minting a trillion dollar coin. I'm being a little facetious about that. I'm not 100% it is her favorite topic, but that being said, a few weeks ago, we interviewed Rowan Gray, Assistant Professor at Willamette Law School, and she definitely came away from this topic, I would say more coin curious, coin-pilled, open to the trillion dollar coin idea than she had been. For anyone listening today, I would definitely suggest listening to that conversation first, and it's about this idea that were we to get into a debt ceiling impasse that there is a statute in a 1996 law that says that in theory, the Secretary of the Treasury can mint proof platinum coinage, and people have argued, including Rowan, that this would allow the government to continue financing even in the event that it isn't allowed to take on more debt. So again, I would encourage everyone to listen to this, but it's a big topic, and so in the meantime, the debt ceiling question has been punted to December, they got 10 Republican votes to essentially go for about two more months, so the question isn't going away.

In the meantime, since then, we've also heard Secretary of the Treasury, Janet Yellen, go on national TV and dismiss the coin idea again as a gimmick. So there is opposition to it. Nonetheless, it is still important, and I think we are going to get to a point in December, where I'm not predicting the coin will be minted, but I do think we will come up against another deadline again, and the question will not go away. It will again be tight of how this is going to get raised and how the US will avoid a possible default. So I am very excited to do a follow-up because we have two guests today. So we have Rowan is back.

Rowan Gray, Assistant Professor at Willamette Law School, the foremost legal authority or has written extensively on the coin, and extremely excited that we have as our guest, Philip Deal, who is the 35th head of the US Mint. And he ran the US Mint from 1994 to 2000 and was one of the drafters, essentially, of the 1996 legislation that allowed for the Platinum Coin. He is currently the president of the US Money Reserve. So we don't have to speculate on what the intention of the or the thinking of the creators of this law were intending because we have the actual one of the creators here right now on Odd Lots. Very excited to bring both those guests, Rowan and Philip, thank you so much for joining us.

Rowan Gray (3:17)

Thank you for having me.

Philip Deal (3:18)

My pleasure.

Joe Weisenthal (3:20)

Philip, this is a real treat because, you know, I feel like often, you know, whether we're talking about some constitution or something, we are like forced to wonder what was going on in the mind of a person who is involved in the drafting of this thing that's become very controversial. So it was a real treat to have you, obviously, multiple people may have been involved in writing this 1996 law, but it is a real treat to have you on.

But before we do that, before we really get back into the law itself, I want to just talk about mechanics for a second. Let's imagine in some world, Yellen is forced to mint the coin, the trillion dollar coin. So Yellen, what happens as the speaking as the former director of the US. Mint, if you get the call, we have to mint the trillion dollar coin to avoid a debt ceiling fiasco. Why do you like walk us through like what would happen operationally at that point?

Philip Deal (4:19)

Well, almost certainly what would happen is there'd be preparation before the order came down and the order would come from the secretary of the treasury. And of course, that will have been discussed with the president, probably with the chairman of the Federal Reserve, and it all be set up. So before the order came down, there would be preparation in order to make sure that the coin was struck at the last minute and could be transported to the Federal Reserve and arrive on time before the debt limit was hit. So the way that would happen is a decision would have to be made on what the coin design would be, because a mold will have to be produced and then that mold will be converted to another mold and then a die that will be used to strike the coin will be produced. And so there's a number of steps that have to be done.