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Ellen Brown
NationofChange / Op-Ed
Published: Sunday 20 January 2013
The trillion dollar coin actually represents one of the most important principles of popular prosperity ever conceived: the creation of money by sovereign governments, debt-free.

The Trillion Dollar Coin: Joke or Game Changer?

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Last week on “The Daily Show,” Jon Stewart characterized the proposal that the White House circumvent the debt ceiling by minting a trillion dollar coin as an attempt to “just make shit up.”

Economist and NY Times columnist Paul Krugman responded with a critical blog post accusing Stuart of a "lack of professionalism" for not taking the trillion dollar coin seriously. However, Krugman himself had called the idea “silly.” He thought it was just less silly -- and less dangerous -- than playing with the debt ceiling, which was itself an unconstitutional shackle on the Treasury’s ability to pay debts already incurred by Congress.

Stewart responded on January 15 that he stood by his “ignorant conclusion that a trillion dollar coin minted to allow the president to circumvent the debt ceiling, however arbitrary that may be, is a stupid f*cking idea.”

It’s all good fun – or is it? Most commentators have missed the real significance of the trillion dollar coin. It is not just about political gamesmanship. For centuries, a secret battle has raged over who should create the nation’s money supply – governments or banks. Today, all that is left of the US Treasury’s money-creating power is the ability to mint coins. If we the people want to reclaim that power so that we can pay our obligations when due, the Treasury will need to mint more than nickels and dimes. It will need to create some coins with very large numbers on them.

To bail out the banks, the Federal Reserve, as head of the private banking system, issued over $2 trillion as “quantitative easing,” simply by creating the money on a computer screen. Congress, the White House, and the Treasury all rolled over and acquiesced. When it was proposed that the government bail itself out of its budget woes by minting a $1 trillion coin, the Federal Reserve said it would not accept the Treasury’s legal tender. And the White House again acquiesced, evidently embarrassed to have entertained this “ludicrous” alternative.

Somehow we have come to accept that it is less silly for the central bank to create money out of thin air and lend it at near zero interest to private commercial banks, to be re-lent to the public and the government at market interest rates, than for the government to simply create the money itself, debt- and interest-free.

The banks obviously have the upper hand in this game; and they’ve had it for the last 2-1/2 centuries, making us forget that any other option exists. We have forgotten our historical roots.  The American colonists did not think it was silly when they escaped a grinding debt to British bankers and a chronically short money supply by printing their own paper scrip, an innovative solution that allowed the colonies to thrive. 

In fact, the trillion dollar coin represents one of the most important principles of popular prosperity ever conceived: national debt-free money creation.  Some of our greatest leaders, including Benjamin Franklin, Thomas Jefferson, and Abraham Lincoln, promoted the essential strategy behind it: that debt-free money offers a way to break the shackles of debt and free the nation to realize its full potential.

We have lost not only the power to create our own money but the memory that we once had that power. With the help of such campaigns as Occupy Wall Street, Strike Debt, and the Free University, however, we are starting to re-learn the great secret of money: that how it gets created determines who has the power in society -- we the people, or they the bankers. 

It is no secret who has that power today.  In the great bailout of 2008, banks were rewarded for  making irresponsible and fraudulent gambles in the subprime mortgage scandal, with no one serving time in jail.  Then there was the robosigning scandal, in which banks committed criminal fraud and came away with a slap on the wrist.  Now we are seeing the LIBOR scandal unfold.  While a commoner might get 10-20 years for robbing a bank, bank executives get huge bonuses for robbing us

We may rail against the banks and demand change, but nothing will change until we grasp their fundamental secret, the foundation of their power: that those who create the nation’s money control the nation.  By mechanisms explained elsewhere, nearly the entire money supply today is created by banks.

Remembering Our Roots: A Refresher Course

Benjamin Franklin was called called “the Father of Paper Money.” He argued before the British Parliament that government-issued money had allowed the colonies to escape the yoke of debt, to thrive and grow. The king, urged by the Bank of England, responded by forbidding all new issues of paper scrip. The colonial economy then sank into a depression, and the colonists rebelled.  They won the revolution, but the power to create money was lost to a private banking oligarchy modeled on the one dominated by the Bank of England.

Fourscore and six years later, President Abraham Lincoln boldly took back the money power during the Civil War. To avoid exorbitant interest rates of 24% to 36%, he decided to print money directly from the US Treasury as US Notes or “greenbacks.” The issuance of $450 million in greenbacks was key to funding not only the North’s victory in the war but an array of pivotal infrastructure projects, including a transcontinental railway system.

Lincoln was assassinated, however and,the greenback program was quickly discontinued. Repeated popular attempts to revive it failed. In 1872, according to  Lynn Wheeler in Triumphant Plutocracy: The Story of American Public Life from 1870 to 1920, New York bankers sent a letter to every bank in the United States, urging them to fund newspapers that opposed government-issued money. The letter read in part:

Dear Sir: It is advisable to do all in your power to sustain such prominent daily and weekly newspapers . . . as will oppose the issuing of greenback paper money, and that you also withhold patronage or favors from all applicants who are not willing to oppose the Government issue of money. Let the Government issue the coin and the banks issue the paper money of the country. . . . [T]o restore to circulation the Government issue of money, will be to provide the people with money, and will therefore seriously affect your individual profit as bankers and lenders.

Bank-created money (which now includes electronic money) could be rented at a profit to the people.  The “people’s money” was limited to coin, which today composes less than one ten-thousandth of M3, the broadest measure of the money supply.

Lincoln’s assassination and the abandonment of debt-free greenbacks effectively marked the exchange of one type of slavery (race-based) for another (wage- and debt-based). As a result, the American government and American people are so heavily mired in debt today that only a radical overhaul of the monetary system can free us.

Gimmick or Game-Changer?

That is the real context and backstory of the trillion dollar coin.  The stakes are much higher today than just fending off the debt ceiling. We the people need to take back the power to issue our own money, and coins are the only means left to us to do it.

The idea of minting large denomination coins to solve economic problems was evidently first suggested by a chairman of the Coinage Subcommittee of the U.S. House of Representatives in the early 1980s. He pointed out that the government could pay off its entire debt with some billion-dollar coins.  The Constitution gives Congress the power to coin money and regulate its value, and no limit is put on the value of the coins it creates. In Web of Debt (2007), I suggested that to solve the government’s debt problems today these would need to be trillion dollar coins.

In legislation initiated in 1982, however, Congress chose to impose limits on the amounts and denominations of most coins. The one exception was the platinum coin, which a special provision allowed to be minted in any amount for commemorative purposes. An attorney named Carlos Mucha, blogging under the pseudonym Beowulf, proposed issuing a platinum coin to capitalize on this loophole, after hearing me mention the trillion dollar coin in a Thom Hartmann interview. At first it was just an amusing exercise.  But with the endless gridlock in Congress over the debt ceiling, it got picked up by serious economists as a way to checkmate the deficit hawks. 

Philip Diehl, former head of the US Mint and co-author of the platinum coin law, confirmed that the coin would be legal tender:

In minting the $1 trillion platinum coin, the Treasury Secretary would be exercising authority which Congress has granted routinely for more than 220 years . . . under power expressly granted to Congress in the Constitution (Article 1, Section 8).

Warren Mosler, one of the founders of Modern Monetary Theory, reviewed the idea and concluded it would work operationally. The funds would simply be new reserve balances at the Fed rather than new Treasury securities.

Joe Firestone pointed out that the trillion dollar coin could solve the government’s debt problems once and for all, putting was in its grasp the power to replace austerity with the abundance enjoyed by our forefathers.

The trillion dollar coin can raise cries of “hyperinflation!” It evokes images of million-mark notes filling wheelbarrows. But as economist Michael Hudson observes:

Every hyperinflation in history has been caused by foreign debt service collapsing the exchange rate. The problem almost always has resulted from wartime foreign currency strains, not domestic spending.

Prof. Randall Wray explains that the coin would not circulate but would be deposited in the government’s account at the Fed, so it could not inflate the circulating money supply. The budget would still need Congressional approval. To keep a lid on spending, Congress would just need to abide by some basic rules of economics. It could spend on goods and services up to full employment without creating price inflation (since supply an d demand would rise together). After that, it would need to tax — not to fund the budget, but to shrink the circulating money supply and avoid driving up prices with excess demand.

Time to Take Back the Money Power

The current economic crisis cannot be solved with the thinking that created it.  There is simply not enough money in the system to fund the services we desperately need, pay down the debt, and keep taxes affordable.  The money supply has shrunk by $4 trillion since 2008, according to the Fed’s own website.  The only solution is to add more money to the real, producing economy; And that means some congressionally-mandated entity needs to create it, either the Fed or the Treasury.

The Fed has declined. In flatly rejecting the Treasury’s legal tender, the Fed as representative of the banks is asserting itself as outranking the elected representatives of the people.  If the Fed won’t acknowledge the coins created by the government, perhaps the government needs to charter a publicly-owned bank that will.

We have a chance today to end the charade of big money gridlock politics, as well as the reign of the big banks. We have the power to choose prosperity over austerity. But to do it, we must first restore the power to create money to the people. 

Author pic
ABOUT Ellen Brown

Ellen is an attorney, author, and president of the Public Banking Institute. In Web of Debt, her latest of eleven books, she shows how the power to create money has been usurped from the people, and how we can get it back. Her websites are and

The more I think about the

The more I think about the big denomination coins idea; the better it looks as an answer to our country's fiscal problems. Considering what would be involved in setting up the Mint to press one coin, it only makes sense to mint a a quantity. One day's run of these coins could secure the financial future for at least a couple of generations. Different smaller denominations could be minted. Then the 1% could carry their money in their pockets. :-)

The Score

The Score Card:

Socialized/Subsidized Elitism: 50 Trillion (plus or minus a few)
The American People: ZERO (or at best one very large negative number)

ETNIKS's picture

Thank you Ellen. Another

Thank you Ellen. Another great post clarifying what the issue is and how it came about.
I had seen the idea being mocked in other sites and while I knew the one trillion coin made sense, I didn't have the details.
Max Keiser didn't know why the coin had to be Platinum, and me either, so now I will send him your article to get him up to speed.

However I just can't see Obama having the balls to create a Public bank to deposit the coin. The man is a declared banksters' lackey. He'll pass on to history as a great failure and a shame to the grand wasted opportunity to really emancipate not only the blacks, but all Americans.

Remember that Obama's

Remember that Obama's grandmother, who really was more of a mother than is biological mother, was a bank vice-president. It's little wonder he has a bankster outlook.

Why create a Public bank? The

Why create a Public bank? The gov't doesn't have to be the one's to hold the coin(s), they could sell high denomination coins to some of the 1% who have that kind of money but do everything they can to avoid giving it to the government in taxes. If a trillion is too high a denomination to attract buyers, why not mint a $10 billion coin - they'd probably become the hottest new item to get the person who already has everything else. We need to get the 1% to pay their fair share - this might be a painless way to do it.

None of the high value coin

None of the high value coin options are a direct tax on the purchaser or holder of the coin. They could be redeemed at any time for other cash (Fed. Reserve Notes) by the holder at full face value. However, if the purchaser/holder kept the coin, the seigniorage (difference between cost of issuing and face value) accrue to the Treasury. If a billionaire were to purchase and hold a $10 B coin, he would be imposing a seigniorage penalty (you could call this a type of tax) of 99.999% on his $10B investment. That's a little higher than the tax rate most billionaires are used to paying.

ETNIKS's picture

CASNYDER Ellen is proposing

Ellen is proposing the foundation of a Public Bank to benefit the nation as the Bank of North Dakota has been benefiting the State for more than 90 years.

Furthermore she specifically mentions it in this article, because the FED has been openly saying they won't accept the Platinum Coin in the US government's account, so this would be the perfect opportunity for Obama to bypass the FRAUDULENT Federal Reserve Board and finally get the nation in a solid footing, by having a true US citizen's government bank where all benefits go to us the taxpayer, not the scumbag banksters.

"I have never yet had any one who could through the use of logic and reason, justify the Federal Government borrowing the use of its own money"
"There is not a single person within range of my voice, who does not know the Federal Reserve is an illegal organization that puts people in debt unnecessarily"
Wright Patman
US Congressman

"History records that the money changers (bankers) have used every form of abuse, intrigue, deceit and violent means possible to maintain their control over government by controlling Money and its issuance."
James Madison

'The study of Money, is one in which complexity is used
to evade truth, not to reveal it"
John Kenneth Galbraith

"The issuing power (of money) should be taken from the banks and
restored to the people, to whom it properly belongs"
"The government should create... all the currency and credit needed to satisfy the spending power of the government and the buying power of the consumers... Money will cease to be the Master and will then become servant of humanity"
Abraham Lincoln

"The bankers own the earth. Take it away from them, but leave them the power to create money, and with a flick of the pen they will create enough money to buy it back again.
However, take away from them the power to create money, and all the great fortunes like mine will disappear, for this would be a happier and better world to live in.
But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money."
-Sir Josiah Stamp
Former Director of
the Bank of England

Relevant post, great quotes.

Relevant post, great quotes.

We should mint that coin and

We should mint that coin and drop it int he middle of the Sahara desert, and then run a raffle open to all countries, groups, and individuals. The only caveat is that those competing to find the coin buy all of their weapons from the USA, excluding nukes and biological weapons. That would piss off the socialists at United Nations. So no nukes or biological.

Of course the idea is to raise over 1 trillion. The only other caveat would be that any money over 1 trillion, after arms companies, like Being, General Electric, and others, make their profit, go to servicing the debt. In other words, there would be a 100% tax on the arms deals.

This is a good way for the 'taxes are socialism [sic]' crowd, capitalism, and government taxes to get a long with each other.

ETNIKS's picture

DWDALLAM Your comment shows

Your comment shows Ellen Brown's article went right over your head.
Please read it again.

You need to realize she's describing TWO different sorts of "money"

It is not the quantity of dollars but the QUALITY of the currency what is needed to change in order to solve the problem.

Here is a link that begins to

Here is a link that begins to shed light on the delimma we face.

If the trillion dollar coin

If the trillion dollar coin is named the Norquist, I'm for it.

There is an error in your

There is an error in your thoughtful and well-written article. The Federal Reserve actually gave $14 trillion, or thereabouts, in interest free loans, to the world's biggest banks, many of which are not even in the US... as part of the 2008-9 crisis. And that was only discovered by a congress driven PARTIAL audit. It was unauthorized and unpublicized... because they can. I agree... perhaps minting a trillion dollar coin is a good idea in the short term, in as much as it starts to reclaim congress' right to print money. However, it is still part of the fiat currency debacle that is the current system where money creation has no connection with reality. It might be a first step. But the next step would be to start creating SOUND money that doesn't tax the people by its very existence through inflation.

ETNIKS's picture

ROOLGER Please further

Please further explain what you mean with:
"However, it is still part of the fiat currency debacle that is the current system where money creation has no connection with reality. It might be a first step. But the next step would be to start creating SOUND money that doesn't tax the people by its very existence through inflation."

1- What do you suggest as the solution to "connect" the issuing of currency to "reality"
2- Is SOUND money to you the sort backed by a metal? or you have other ideas?

I appreciate the clear-eyed

I appreciate the clear-eyed look at how the country runs its finances. Mos of us (I admit it) have only a fuzzy notion of how it all works. The banks will not give up their hold on our money supply, though, and will invest whatever it takes to convince the people that to loosen the money-changer's grip in any way would be national suicide. I especially paid attention to the paragraph that dealt with hyperinflation--because we are told we should be very afraid of that happening. The fact that hyperinflation usually comes from outside (other countries) not inside, is an eye opener. Thank you.

Very courageous post Ellen.

Very courageous post Ellen. Another bit of history is that Andrew Jackson also contested the banks over who would coin the US money; the banks or the government. Jackson won this battle temporarily and this was one of the last times our government budget was balanced and in a surplus.

Also, who really is Jon Stewert? He has a title as a comedian so why is he so concerned with our money supply that he would say it is a "stupid f@#king idea". Has attack remind me of a preemptive strike reminiscent of a Rothschild Jewish zionist.

Is Stewert giving cover to the federal reserve by his laser like attack without any kind of explanation except that it's a "stupid f@#king idea". This is exactly how the federal reserve is able to keep power over us. They simply attack those in our government who advocate our coining money which the constitution permits.

The problem is that our President and those in congress have recieved so much bribe money from the banks that they aren't thinking of the welfare of the American people. Our politicians main concern is that they become and remain millionaires at the people's expense.

As you noted John Stewart is

As you noted John Stewart is a comedian, so why are you so agitated about what he says? Also, the racist snipe adds nothing to a civil discourse on monetary policy.

Comedian is just his cover,

Comedian is just his cover, his saying that our government printing our own currency by minting a $1 trillion dollar coin is a "stupid f@#king idea" demeans our treasury getting control of our monetary system.

If you haven't noticed, we are said to be $16 trillion in debt. The banksters, politicians, and corporate interest want to use this debt to justify cutting programs like social security, medicare, and a host of other social programs.

I don't know where your interest lie. If you are already wealthy, you couldn' t give a flying f@#k. If you are part of the midde class and poor this issue should concern you.

As far as the racial snipe goes; I an just trying to be specific. I know that all Jews are not zionist and not all zionist are Jews. But most Zionist are Jews. If you are a Jews and not a Rothschild Zionist I am not referring to you so you shouldn't take offense. If you still take offense; well I'm sorry but the my country being $16 trillion in debt takes precidents over your hurt feelings.

ETNIKS's picture

I agree with you Kofi, and I

I agree with you Kofi, and I must add some of the most ardent fighters against this Zionist conspiracy are Jews themselves.



You can take a horse to water

You can take a horse to water but you cant make him drink great idea but
how do you make the average citizen push this idea and force this to happen.
It is a strange time we live in as the news states that 11 million more homes are near foreclosure but housing start ups are increasing and old homes are selling again. Foreign investors are buying up the realestate so eventually when the economy gets better we can afford a by them much more expensive house and default again when the economy faulters agin and again. The coin could create some stability for the citizens that are here now not foreigners investing in our misfortune. There should be foreign investment taxes for real estate why should they profit on our misfortune.

ETNIKS's picture

The solution is to create a

The solution is to create a movement that distinguishes the difference between DEBT-BASED money and DEBT-FREE money.

They are created different and behave totally different as well, but most people today have no idea.

The challenge it to find a way to explain it as simple as it is necessary for a big enough group of people to bring about the change you're talking about.

I have been writing to Amy Goodman and Juan Gonzalez of, Bill Moyers and to Paul Jay of The Real News Network, among others, suggesting them to look at this important issue, to no avail.

Great post Ellen. I have been

Great post Ellen. I have been following this debate for weeks and have a couple of comments. Carlos Macha has posted an excellent analysis of the legality of the TDC and why the Federal Reserve cannot refuse the TDC or, if it tried, would be almost certain to lose in court. Congress has given precedence to the Secretary of the Treasury over the Chairman of the FR in cases of conflict. If the FR tried to challenge the Secretary's order, it might very well lose its vaunted independence under the concept of a unified executive, which at least two of the conservative justices of the SC have been promoting, and which Obama appointees would support in this dispute.
A second point is the fact that the FR is holding billions of dollars of uncirculated coins in their vaults right now, all of which have been credited to the Treasury's account at face value. This is not some hair brained scheme.

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