This Is How They Could Literally Mint a Trillion Dollar Coin

A few weeks ago, we interviewed Rowan Gray, assistant professor at well LAMTT Law School, and she definitely came away from this topic. I would say more coin curious coin pelled 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 impass that there is a statute in the law that says that, in theory, the Treasury 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 m In the meantime, the dead ceiling question has been punted to December. They got ten 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 Jenny Yellen go on National TV and dismissed the coin idea again as a gimmick. Still there

is opposition to it. Nonetheless, it is still important, and I think we're going to get to a point in this member where I'm not predicting the colina will be minted, but I do think we will come up against another deadline again and the question will not go away. It will it will again be tight of what 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 rowing his back, Rowan Gray, Assistant Professor Lammet Law School, the foremost legal authority or the has written extensively on the coin and extremely excited that you know, we have as our guest Philip Deal, who is the thirty five head of the U. S Mint, and he was ran the U S Mint from two thousand and was one of the drafters essentially of the legislation that allowed for the platinum coin. He's currently the President of

the US Money Reserve. So we don't have to spare alculate on what the intention of 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 of those guests, Rowan and Philip. Thank you so much for joining us. Thank you for

having me my pleasure. Philip, This is a real treat because, you know, I feel like often, you know, whether as we're talking about some constitution or something, we are like forced to wonder what was going on in the mind of the person of a person who has 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 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 yell And is forced to mint the coin, the trillion dollar coin. So, yeah, what happened as the speaking as the former director of the U S Mint, if you get the call we have to mint the trillion dollar coin to avoid a

dead ceiling fiasco. Why do you look, Walker is through? Like, what would happen operationally at that point, 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'll 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 dead 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 will that will be used to strike the coin will be produced, and so there's a number of

steps that have to be done. Now, undoubtedly they'd want to short circuit this process as much as possible, and already in fact created by this coin by this legislation, is the Platinum American Eagle, and they would take the one ounce coin design and all they'd have to do is replace one trillion dollars trillion spelled out, not with all the zeros, and replace one hundred dollars on the

obverse of the coin. And that would be a very simple and straightforward alteration in the current design of the coin. And then those molds would be created and the dye would be carved, and then everything would be prepared. Once the order came down, a blank, a platinum blank, one ounced blank would be taken off the shelf and west point where the platinum Eagle is struck, and it would be struck multiple times, and that coin at that point

will be minted. From West Point, it would could be flown by a helicopter to the Federal Reserve Bank in New York, and the moment that coin is accepted at the Federal Reserve, it registers as a trillion dollars in what is called senior ridge. Your your sense of the timing. Okay, so if you established they have the blanks, the only thing they really they don't even have to put all the zeros on the coin and they literally just have to write it on one thing. What is in your sense?

I think I saw you give a brief interview with Actually you think this could all be done in the span of a few hours. Yea, So well, assuming that all of the preparation, the changing of the design very simple, the molds and then the carving of the doe die is done several days beforehand, and that might take a few days of preparation. At that point, once the order comes down that that blank goes into the press, it struck and transported to the New York Federal Reserve. And yes,

that's a few hours. It's absolutely extraordinary. The the idea that like money, you know, could be created like this, and I think like one of the things, and you know, talking to both of you Rowan and Philip, is things exist. We still use them, use quarters of fair amounts. Sometimes people will find them annoying. Sometimes people talk about things

like phasing out the penny, etcetera. It feels like in the modern discussion about money, there's just very little talk about you know, we talked about the FED printing money, or we thought talked about QUI or these theoretical concepts, But in the modern discussion of money, there is just not a whole lot of discussion about a the role of coinage at all, and be certainly not the operational aspects of producing coinage. Yes, that's right, and so much

of it is just taken for granted. We're very utilitarian in the United States. This is one thing I really discovered when I was directed the ment. I really didn't know that much about coinage. I was not a collector when I was growing up or afterwards. And because we're so utilitarian about coinage, we really just think of them as round disk of metal and you know, and that

we exchange in commerce. Thomas Jefferson and the founders understood that coinage is an expression of the sovereignty of a people. So about the same time Jefferson was writing the Declaration of Independence, he was laying the conceptual foundation for American coinage that would come to fruition with the creation of

the United States. Men. I think it may have been one of the first agencies that was created under the new constitution, and then the production of a coinage and that symbolism of the sovereignty who and what we celebrate on the on the face of a coin you know that has been tremendous, has been recognized as tremendous symbolic

value going back four thousand years. Can I ask a question, Philip, you mentioned, you know, it would take a few days to to set up the new dies and things, and then only a few hours to strike the coin um. But when it comes to the Platinum Statute, it seems to me and we don't sort of spend that much time talking about this because we usually focused on the fact that the statute provides for almost unlimited discretion on the denomination, but it also specifies pretty much unlimited discretion

on the design and specifications of the claim. So if if a call came down and said, you know, we need this out in three hours from now, is there actually anything legally preventing using the existing hundred dollar die as it is, and then you know, crossing it out in sharpie pan or something. I know, it's a bit untooth and and and doesn't really kind of have the gravitas of of the symbolism that we might like in

a pinch. Is there anything actually that legally requires the number on the coin to be the number that we we kind of call it with you know, the legal purposes, or if we really had to, is that another fiction we could just indulge in along with you know, the nominal value itself being something that's declared by law, by feat that we could simply declare its its face value even if it was a smooth, flat disc with no

inscription on it, Well, there's no precedent for that. And on something that is this high profile, you want to definitely ground uh, your policy and your action on the policy on not only the law, but two hundred years, two hundred and thirty years of precedent. And in that, we really have two ways of evaluating the value of coin. One is the face value, which is unrelated to any intrinsic value of the coin. Once we say as a government it is worth a hundred dollars, it's worth a

hundred dollars. That's the nature of fiat currency. The other way with with bullion coins, and this is what we do with the platinum egual bullion coin is its price based on the spot price of platinum at the time of sale, and those are the two primary ways in which the widely recognized traded coins in the United States are priced. There's also these collectible coins and commemorative coins

that had more discretion. But I have really one of the points I've wanted to make, because so many of the opponents of the coins and others who have sort of brought into the mythology of the reading of that statute, is that the coin that is authorized by this legislation is a niche collectible that all the you know, a small portion of the American public would have any interest in.

That simply is not true. And as a matter of fact, this is I know this is unusual for the head of an agency to write the legislation, but I wrote that legislation, and I mean it didn't take rocket science. It's very short, and I knew exactly what I wanted and what my people wanted to do with this, and that is to authorize a bullion coin that we could take into the world and compete worldwide. And the reference

to proof does not negate that. But it also opened the door for us as a byproduct of the bullion going to produce a collectible coin. So everywhere else in coinage law seems to be highly prescribed and there's like very clear clear designs on the quarter and the dime and the nickel, etcetera. And even within the amendment there

are restrictions elsewhere. And when the mint as you were involved in, then maybe we'll get into this does something new with coinage such as the collectible fifty State quarters endeavor. You know, there's very strict rollout rules, etcetera. And again all very clearly prescribed how it's going to work. And so that I guess that is why the platinum coins section k in this That's why it even stands out because it's so explicit in its lack of rules, which

is unusual for coins. So can you just talk us through why platinum and why specific there's one subsection of the law. You made it a point in your drafting of it to create maximum flexibility. We I was doing a complete transform leading a complete transformation of the United States. Meant it was a it was a race car up on blocks in somebody's backyard when I came in in ninety four, and I I saw the potential of the

US meant. At that point, I told the Secretary Treasury, Lloyd Benson, who I had worked for in the Senate. I had been his first chief of staff at Treasury. I told him, guess I'd like to have that presidential appointment because I think I can do something. And over the next two years we made some major transformations of the MINT that led me to believe that we were prepared to compete in international markets in a way that

the US men had never done before. And part of that was because we had already built an international distribution network for a World Cup commemorative coin when the US hosted the World Cup in ninety four, and then for the n and nineties six Olympic coin programs, and those three years had those two programs over three years had tremendous international sales potential, and we went out and built the most extensive international numismatic sales network ever anywhere in

the world. And we had also we had six continents covered. I told my director of marketing, what's wrong with Antarctica, UH, why can't we have a sales contract there? And he went to to the National UH Atmospheric and Oceanic Commission and actually got a distribution contract with them, and that year's annual report had a photograph of a scientists holding

up our coins at the South Pole. So we we were very intent on making this a very wide distribution and we had great success with that program, and I wanted to build on that success and but move out of the collectible market into the bullion market, which is a worldwide, highly competitive market with about six or seven

ments national mints that compete in that market. And the two big markets that I had targeted were Japan in the United States, and I felt like we could go in and of course in the US we immediately seize that market away from our competitors, but within six months we had taken the about six of the Happanese market as well, and that was really important to me, not

just for bragging rights. I'm a native Texan and that has value, but also because I was already setting my sights on the next program, which was the Fifty States Quarters program, and I felt like if we demonstrated that we were capable of competing in international markets, would be building competence in Congress to get that enacted. And it was ever a point where anybody said, do you stop.

You're making too many coins. You're you're earning too much sign yourge, you're returning you're returning too much profit on a net basis to the Treasury. You know, we're not able to borrow as many Treasury securities because you're making it unnecessary for us to issue. Nobody ever told me to start to stop making profits, uh, And that was

a real bragging point for us. In fact, one of the things says I was able to work with with the chairman of my my sub committee to pass the fifty State Quarters Act over Adam and opposition by Treasury

at the highest levels of Treasury. And one of the way I sold it to him, Michael Castle, and we sold it to other people on the hill, was that conservatively we had projected that the fifty State Quarters program over ten years would create two point six billion dollars and senior ridge profit, you know, producing coins for the purpose of provide scenerdge to the Treasury Department, over and above what the baseline would be dates back, you know,

to that fifty State Quarters program. And so the fact that we would do it with a trillion dollar coin in principle is no different whatsoever. I mean sure, it has a couple more zeros behind it, but it's the same thing. So this is something I'm really struck by and kind of fascinated by. Which is the sort of

I guess it would be agency entrepreneurialism. Like you had this vision for the fifty State Quarters project, but you also had this idea of, like to build up to that, you needed to execute on something before that, to build up credibility so that Mike Castle and others would want to even like, you know, think about further coinage legislation,

put an effort into it. Can you talk a little bit about that mentality of like building up goodwill within Congress and the idea of, like, let's execute on something straightforward, expanding our share in the platinum bullion market with the idea of then gaining additional powers for the mint, and like you're sort of like I guess, I would say, working the inside game of expanding the discretion and power

of the Mint. So I was sworn in. I went into the United States Men in September of of ninety three, and my Republican predecessor, David Ryder gave me a great orientation. We overlap for about three or four months. He gave me a great orientation. We have remained friends over all these years. And so I went into the MINT months before I was even nominated, formally nominated, and then in June I was sworn in after a Senate confirmation. I

was sworn in by Secretary Benson. So immediately one of the first acts I took because of the analysis that I had done with David, was we saw that the MINT was balkanized by too many political appointees. Each the head of each MINT was headed by a presidential appointee. These are the regional mets you're talking about. Oh, yes, San Francisco, Denver, kind of like the regional Feds. Yes,

that's right, San Francisco, Denver, Philadelphia, New York. And of course those people got their job not from the Director of the Men, not from the Secretary of the Treasury, not even I mean they were formally nominated by the president, but they got their jobs from the senior senator of the president's party in each state. They certainly didn't feel like the Director of the Men was their boss, you know.

So these are little fiefdoms. And one of the first things I came to realize was that's a huge problem in the management of the men, and it was the source of multiple problems that we saw. So one of the first things I did is I went over Treasury

and said, I want to eliminate nine political appointees. And there are several people, of course, the Secretary I didn't go to him first, but there were several people who laughed at me and said, there's no way you'll be able to get the White House to agree to this because their prime patronage positions. People don't even need to go to Washington and just stay stay home and do

those jobs. But the Secretary weight in. I made the case to him that you know, if we're going to turn this place around, this is going to be one of the first things we do. And he agreed. In the White House lonebole agreed not to fill those positions. Now that's temporary, that could be changed at any moment. I went over to Stinny Hoyer, who had had constituents who worked at the Mint, and he said, yes, you know, and I found a sponsor for the and we were

able to move legislation that eliminated permanently those positions. Well. November nine, of course, is the gen Rich Revolution. And when I go in to meet with my new Republican chairman in the House, I walk in the door with the credential of deep politicizing the US meant by that time, I'm sure they were the only nine political positions that had been administered that had been eliminated by the administration. So I walked down the door with tremendous credibility on

the Republican side that I meant business. The reality is is that I've been a Democrat all my life, from being a young teenager. But I had built this rapport and this level of trust. It was very fortunately I had to committee subcommittee chairs who I immediately made a connection with, and they were willing to carry a series

of reform legislation. You know, one thing that's really striking to me, and you know, you talked about for the for the beginning of coinage for sure, but also just going back to Thomas Jefferson, this idea of coinage as this sort of like expression of the state. And we talked about Fiat money and row and you know, coming from the M M T perspective, obviously, you know, we talked about money as a sort of inherent state phenomenon.

You know, even though I sort of early on talked about we don't really think about coins very much in the modern day. Generally speaking, it is one of the few times in which people are regularly interfacing with something

clearly created by the government. I mean, the government obviously permeates many aspects of our lives, the regulation and laws, but there aren't many times the day I guess the other one of the bills or maybe postage stamps, although those are used less and less in which were literally interfacing and using an express creation of something that the government made in a very straightforward way where there's no

ambiguity about who created it. How much did you it was that something that you thought about as this idea of like delivering a service to the public that was clearly recognizable as something that like we want kind of like constituent service, customer service, Like how much of that framework did you take to the job? Oh, that was crucial, In fact, it was. It was the first major project

that I took on United States. Meant sells these commemorative and collectible coins to a pretty large population of collectors, mostly in the United States. So we'd take these orders and we'd deliver the product within six to nine months is how long it took to deliver a product. And of course, unless you have a monopoly on a product, you have very committed customers. Nobody puts up with that.

So one of the things we did immediately was to make a commitment, and we ended up making a series of commitments to the point in which we were delivering about of all products within one week. That was the camel's nose under the tent from me for beginning to reform.

The ment was too and I made a commitment before I had gotten endorsement from my people because I wanted to hold our feet to the fire, and I also wanted them to know you said it, stretch objectives, and even if you don't meet them, if you make major progress and then renew the effort, people begin can believe you.

And I all so felt that one of the things that's really crucial in federal government agencies they become so insulated from their publics and from their customers or clients because they have been dehumanized really for forty years, where those Washington bureaucrats are always the enemy of the people, and their funding is cut and oftentimes their political appointees are hostile to the mission. So I was very much supportive of public employees and also believed in the mission

of the organization was committed to it. So in that case, to break the old habits, I believe it was necessary to strip the installation off the organization to put people, either figuratively or literally, face to face with their customers, whether the customer was an external customer or an intern a customer in which someone was supporting somebody's else activity in the agency. So that was crucial to me. Now, Joe,

there are two pieces. You've talked about. One piece and that is how many people produce a product that is touched by every American. It was a unique aspect of the United States meant. But then there's the other side of it, and that is coins are works of art, and sometimes the art isn't very good, and sometimes the art is spectacular, and those works of art are likely some of them are going to be in museums two

thousand years from now. So what other job can you work at that has those two counterbalanced values and where you trace the history and the legacy back to Jefferson and Hamilton's So all of that was crucial to me

really energizing an agency that become very demoralized. I think I think there's also another layer there, which is that for a long time, you know, minting coins and for example, issuing bonds meant something very different in the monetary regime, where bond issuance meant maybe you have a targeting international money markets, maybe you don't have to have any pressure on your metal reserves if you're under a gold standard.

But nowadays, of course, the coins that we issue are not sort of tied closely to underlying market fluctuations in the in the metal value, unless you're selling to bullion investors. And of course the coin itself can become, you know, with any denomination, much more something like the high high value money that it might have been in the early Republic, again but without any linkage to underlying metal content. But the other part of it is that the coins are

very private, even more private than notes with barcodes. And in this world now where there's a sort of war on cash and there are these increasing questions about digital privacy and digital data collection, what the mint represents is not just small value or you know, hearkening back to a different era where metal was more important in money, but also a different design principle compared to central banks

with their balance sheets and their account based framework. And your story of kind of the entrepreneurial mint getting getting larger is one that to me, you can fit into a larger story of institutions rising and falling. You know, there was a period where before the Federal reserved, there was an independent treasury that had its own set of accounts, the Federals of coming into existence, the postal service offering banking at one point, and they're not offering it, and

now people are talking about it coming back. But you could imagine a moment, you know, maybe in the nineties when you were presidently thinking about these questions of digital money, or now today with the debates over the issuance of a digital dollar, where the mint, you know, it comes into a high degree of prominence and what may be considered you a rounding era in the federal budget now and sign yourridge becomes a much more central way that

we designed the accounting for how new money gets issued and spent. So I just wanted to get any thoughts about that, just that idea that kind of the mint might be considered a very junior partner with the FED today, but that over time, those those dynamics change and involve, and they're not fixed right now. The kind of dynamic we have today isn't the only one that could ever exist again in the future. Now, that's that's very true

from my experience. When I went in the door of the first day of the Clinton administration in January, the very first briefing I got was on the counterfeiting of the one dollar bill, and I won't go into the details on it, but what was absolutely clear, So this and the counterfeiting of the one dollar bill went back over a decade in which the Secret Service at that time part of the Treasury Department knew that this super one note that was virtually indistinguishable from the real thing

was a problem. And at the end of the briefing, I said, why hasn't this been dealt with before? And they didn't have an answer for me, And before long I understood nobody at the Treasury wanted to tackle that. And currency in coinage. People go to the Treasury Department to make big policy and they don't want to be

weighed down by little stuff like massive counterfeiting bill. And I and It really helped me to understand that point of view from Treasury when I went over to become director of the MEN, because it told me something very important, and that was in terms of my reform strategy, and that is fly below the radar as long as you can, because the way Treasury sees it is coinage currency all that has trouble on it. And that was really kind of a hangover from the Susan b Anthony disaster from

thirteen years earlier. Can you actually talk? You have a blog and I and I've read a few of the posts. What was the Susan b Anthony disaster? Um? And this was something that aim well before you were the head of the US. But when you refer to that to there is the Susan b Anthony, I think it's a dollar. What was the what happened with that endeavor? Well, there are two levels in which it was a disaster. One

was as a product. It was a little bit larger than a quarter, and it was the same color, the same silver color as a quarter, and so people initially confused them and it was the sort of thing and if you reached in your pocket, you'd pull out one of the one of the Susan B. Anthony's thinking it was a quarter or whatever. In reality, if you carry them around in your pocket very long, then you can tell the difference by size, but and also by the reading or the lack of it on the on the edge.

But it was a disaster because Americans didn't want to carry a heavier coin. There was that resistance. Second, there was a lot of criticism of the design of Susan B Anthony itself. There was a claim that it wasn't an attractive design. I mean, you know, it was petty, but it was subject to criticism in that respect. But at the political level, the coin was launched in ninety nine and so there was this rumbling of dissatisfaction about it.

But in the presidential election in which Jimmy Carter was running for re election, inflation had spiked and Ronald Reagan, of course was running against him. Small government government can't work because you know the big government as the enemy.

It came to be called the Carter Quarter, really emphasizing the inflation and the confusion between when the Susan B Anthony in the quarter, and it was a shock at the United States meant, like you said, I didn't come in until thirteen years later, but it was as though it had happened yesterday there and as a matter of fact, right after the Gingrich Revolution in January came around, the Republican leadership proposed a new dollar coin, and my attitude was, sure,

let's talk about it, let's but let's don't make the same mistakes, and legislation was filed completely replicating that mistake, this whole series of mistakes, and so I ended up doing a campaign, public campaign and testifying Congress opposing the new dollar coin. And after we defeated that, a few years later we came forward with the plan for the sack of Jeweeah coin, which did not suffer those kinds of of weaknesses because that one is actually a different uh.

That one's gold color. That's right, that's right. And it's viewed as being a failure because ultimately it was. It was a failure in that it didn't replace the dollar bill, but it was an enormous success when we issued it. The Federal Reserve doesn't like coins, and without admit director and I left in two thousand, we launched a few months before my term was over, and without a director who would take on the feller reserve to ensure its

success than had died on the vine. Basically, you know, you just talked then about the FED not liking coins and the idea that sort of the often works best when it's under the radar. It seems to me that there is a bit of kind of into agency servianism. Either way. The coin is discussed when we talk about kind of budget gimmicks, you know, reading the Social Security Trust Fund or something is that is the Treasury Secretary

in the eighties. That's an acceptable budget gimmick. The use of Section thirteen three authority into downs in and nine, all these special purpose vehicles and lending facilities the FED does where the Treasury provides the underlying capital, so the first losses are borne by the Treasury, but it's leveraged by the FED. Those are acceptable accounting gimmicks because they sound complex, They sound like the kinds of things that you would do in a Wall Street trading firm or something.

But this gimmick it almost defends the sensibilities of the kind of high finance, high high minded types because it's it's sort of giving power to this lowly agency to save the day when all of the the big boys couldn't do it. Do you experience any of that? I know you were actually kind of high about the Treasury and you were in the legislature before that, But do you experience any of that kind of chauvinism with your agency interactions something like that? We certainly experienced it with

the Sacka Joia dollar coin. We did extensive market research on what is it going to take for this coin to be accepted enthusiastically by the American public. We also did market research in depth with the banks, because the banks are our channel to get the coin into the hands of the public, our channel first through the Federal

Reserve and then through the banks. So we had several meetings with banks, bankers, and the Federal Reserve was there, and basically they laid out this catch twenty two for us, and that was, we will order the new dollar coin as soon as we know that the American public will

accept it. Our response was, how are we supposed to do that if we can't get it into the hands of And we showed them the market research that showed that there was a really good chance that when we launched this coin that would be big demand for it, and the Federal Reserve just didn't weigh in despite the ment congressional mandate to produce and circulate this coin. And at the time, I've always been suspicious of concentrated economic power,

in particular political power to but concentrated economic power. And I've seen over and over and over again over the years through my career, both outside the government inside the government, how agencies are captured by the people they regulate or you know, the institutions they served. And what I saw there was the Federal Reserve acting as an advocate for

the banks that they were supposed to regulate. And and what my thought about that was a lot of people say, well, you know, that's penny any that's opinion, you know, bun Inton. My what my thought was, if on something that is so small, that has so little impact on the banks, that the FED will be their representative within the government, what is the chance that the Fed won't do that on the things that are really crucial to the health

of the banks. So what I in order to overcome that problem, I went to the new lobbyists for Walmart, who had been a distributor of our Olympic coins in and said, I'd like to launch this coin through three thousand locations across the country in your stores, all on the same day, January two thousand and they said sure, and it was a huge success. Within a matter of hours or days, the stores exhausted their supply. So when their customers said, oh, well, we didn't get the dollar coin,

what do they do? They call the bank? Banks don't have them, so because they didn't order them and they resisted it. So who do they call? Well, the FED? And who does the FED called? The Secretary of the Treasury. So I you know, I hear from the Secretary of Treasury, but my job was to fade the heat. I loved it. I mean, it's funny how many of these conversations seem

to come full circle. And of course even today there are recurrent conversations about a company like Walmart into retail banking and fierce opposition, and so it's interesting to hear that in that example. But also I want to go back to like the point also that Rohan is making about like it's kind of like what gets called a gimmick or not is very strange because when we heard from Secretary Yellen recently and she called the trillion dollar

coin very dismissively a gimmick. But if Rohan has pointed out, you know other things that are like extraordinary measures are okay and weird things where the Treasury provides financing for the Fed, of the Fed provides leverage, you know, those don't get called gimmicks. It seems to me that there is nothing less gimmicky than a coin that on some sense,

coins have existed for over three thousand years. Paying for things with coinage is about one of the oldest traditions there is, putting a number on a coin and saying, as you established that that is the value of that coin. It almost is like of all the things we talked about in financing, there's almost to me it's a sense of like creating a coin might be the least gimmicky form of public fundraising there is. Yeah, well, that's exactly right.

The concept of scene ridge that we talked about earlier is an ancient concept. It goes back thousands of years, almost as old as coinage is itself. The concept of senior is real simple, and that is it is the difference between the cost of producing a coin and it's face value, and that margin represents a form of profit. It's not treated that way anymore, but it used to

be a way of funding the crown. So there'd be this small difference between the gold and a coin and the face value on the coin, and that represented a profit that went to the king. And if you were a mint director who produced those coins and you shaved a little bit of metal off that and base, that's where the concept debasing coinage or your currency comes from. Then if you were discovered, you were beheaded. And fortunately ment directors don't have to go through that anymore. But yes,

that's a very old concept. It seems paying for things with coins of the state, paying for things with coins of the state, saying that the coin is worth this much because we say it is because we ascribed it into the blank, seems like a very old concept. In a way. It feels very on gimmicky. That's right, to go back to your the whole question of about about whether or not the trillion dollar coin is a gimmick.

As we're talking about the concept of coinage, the concept of scene ridge, I mean, it is so deeply embedded in human history that it's hard to call that a gimmick. But I've said that the trillion dollar coins suffers a branding problem, and that is it's too simple, I mean quantitative easing. You know that sounds really sophisticated. People say, oh,

I can't conceive of that. But also what I'm discovering is that tree and dollar coin that that also has a brand advantage, and that is that people understand what that is. And if we get in front of it and explain away all the mythology and misinformation and disinformation, then I think there's an opportunity for it to overcome

the negative aspects of the brand. Yeah, it seems to me a lot of people say, well, we should do this other alternative that would be functionally equivalent, but that would would not you know, suffer the simplicity that actually causes people to understand it. So in their view, you know, much more complicated, giving things that that you know, involves seven layers of jargon and all this kind of thing. It's a feature, not a bug that they're so complicated,

because then people don't actually understand what's going on. Their their eyes grew cross eyed. They sort of tune out before you finish describing all the steps, and that's that's a good thing for them, and you know, whatever your views are about whether or not the public should be able to understand how money works, it seems like that's actually the real disagreement here. It's not the ones a gimmick and one isn't a gimmick. It's that do you want a gimmick designed to obscure or does it a

gimmick design to clarify? One sense? You know, if we're going to call the coin of gimmick at all. And it seems to me that we almost spend a lot of time stepping around that that that we that everybody wants to frame it as though one is serious and one isn't, or one is more sort of in line with the spirit of existing law and one isn't, when really it just boils down to whether or not we're trying to educate and enlighten or sort of you are and pull the wooloiver in the proceeds. Yeah, that's a

that's an excellent point. And if and if we've discovered anything in the last five years, and a number of things we've discovered, one is that there is a deep suspicion of ex so called expertise and real expertise jargon, which is associated with certain kinds of expertise are suspect in American culture. So quantitative easing. Yeah, you know, people say, I don't know what that is, but I don't, you know,

I suspect what it is. Trade your dollar coin. People get that, they understand it, and so, and really the concept behind it is it's not that difficult. So let me finish here with that. It's a kind of a hypothetical or maybe it's an impossible question to answer. But the dead ceiling has always been this sort of political trip wire, but we've only really had extreme dead ceiling showdowns. We talked about this with Rowan a couple of weeks

ago on the show. Really since really it's already getting very intense under the Obama here an after the big Republican victory, and so you know, some of these questions about this sort of like, wow, we might really default.

We don't really know much about how past Treasury secretaries might have dealt with this, but it is a hardball move, right, So, like there is this norm that it's like, okay, obviously yelling or whoever else would be Treasary secretary would like to just raise the dead ceiling in the conventional manner and then ideally forget about it in a few years.

But to invoke the coin and or to say, you know what, we're not going to play games, We're not going to let you all hold the economy hostage, whatever, is a hardball political move, you know, it's that would be it's outside the norm. It's not it's not the norm of how these things typically go down. Do you think there are like Treasury secretaries of the past who may have had more of an appetite for the the

hardball of this option. I mean, obviously from a legal standpoint, it's only been open since with with the amendment to the coin in Jack that you got passed. But in terms of like the appetite to say, you know what, don't come to us with the negotiation, don't stall. We have a coin that we can mint and we're not

going to talk about this. Are there is this something that in different environments maybe there would have just been more willingness to roll over the opposition by invoking the Colin option earlier Alexander Hamilton's it's the only one that

comes to mind. I don't know if any secretary who would have wanted to pursue this option unless his or her back was to the wall, and if it comes down to the nation to falling on its debts or many a triion dollar coin, I think there are a lot of Secretaries of the Treasury who would have considered it, and if it was the only viable option, it's just the estimate is the defaulting on the debt would eliminate

fifteen treeion dollars in wealth in this nation. Now, if that's a choice or a treeion dollar coign easy choice, And I think a secret treasury would do the same thing. And I think it's an easy decision, fift trillion dollars of wealth created or a coin that's a little gimmicky. You would not think that that is a hard choice, at least I wouldn't, But apparently, you know you think that's an easy call. Well, it's not an easy call.

If there's no other option, there are There is another option that I think is a viable option, and that is the fourteenth Amendment. I think the fourteenth Amendment is a clear option here. And you know, I don't think the usually I don't think the trillion dollar coin is a gimmick, but it is subject to criticism as a gimmick. The Constitution of the United States and the fourteenth Amendment is has no vulnerability to that. It has other weaknesses

and vulnerabilities, but that's not one of them. You know. We could go on forever, and honestly, this is so this is such a fascinating discussion to me, because even beyond this sort of politics right now, and even beyond the sort of legal dimension, just thinking about like the history of money and the actual operation of how does money get made and then how to the public essentially to me like an under disgusted and under examined topic.

We could go on forever, but this was such a treat Rowan, it was great to have you back and Mint director deal so great to hear from your perspective as having a been involved in the right of the law, but just seeing how this all works. Thank you both so much for coming on a lot. Thanks for having me.

Sup pleasure to thank you well. Obviously Tracy wasn't here, so I can't banter with her as I would normally do, but I strongly suspect, you know, I really do think after our first Mint the coin episode, that Tracy was getting fairly coin pilled, and I am convinced that after this one and hearing from former MINT director Deal himself, that she would be fully on board. Maybe that's a little presumptuous of me to say, but I really think

she would have been sold. Like I said kind of at the end, there are so many like aspects of that discussion that I find like genuinely fascinating. Like, you know,

there's something I've been thinking about. It doesn't even really relate to money per se, but the idea of agency and sub agency entrepreneurialism and the idea of as um Philip Deal was talked, think about, let's do this simple thing, Let's do this straightforward thing of expanding our share in the bullion market so that then we can get congressional support for something more ambitious, the fifty State Quarters project. Even like thinking about that and how like our sort

of government operates super interesting. Also really interested in this idea that, like you know, people add Treasury might be interested in like big ideas, like big reforms of tax policy, but it's something sort of like simple and operational, like how do you avoid counterfeiting the d dollar bill is not something that people in the government maybe gets so excited about because it's not as you know, the ideas aren't as big anyway, so many interesting things from that discussion.

It is a real treat to hear from both of them, so that further Ado and I there. This has been another episode of the Odd Lots podcast. I'm Joe Wisn't thought you could follow me on Twitter at the Stalwart. Follow my co host on Twitter, Tracy Alloway at ac Alloway. Follow our guests on Twitter. Rowan Gray He's at Rowan Gray. Follow Mint director Deal Philip Deal. He's on Twitter at Philip and Deal. Although he hasn't tweeted in a while,

I think you should get back to tweeting. Yes't tweeted, Since he should, he should get a little more public, in my opinion. Follow our producer Laura Carlson. She's at Laura M. Carlson. And check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening.