[tacticalogic]

If they do the coin stunt, it will almost certainly end up in the courts.

Any chance it'll cause our credit rating to get cut?

[Ancesthntr]

Any chance it'll cause our credit rating to get cut?

Any chance it won't? Even if it doesn't happen, if this ludicrous proposal gets any serious traction then we will see all commodities spike in price and a refusal of foreigners to buy our Treasuries at all. Then we'll be stuck with the Fed buying our debt (i.e. monetizing).

Oh, yeah, we're already monetizing to the extent of $85 billion/month. I guess that Maobama just decided that a quick poison is better than a slow one.

[Mr. Know It All]

Any chance it'll cause our credit rating to get cut?

Not directly. Our credit rating is based on us paying our bills. Since our bills are all in US Dollars, it doesn't matter how worthless they are for that purpose. If our bills were in Euros and the dollar plunged to $1000 to the Euro, we'd be in huge trouble.

Of course, if our currency crashed due to hyperinflation, we'll have all kinds of other problems which will probably lead to a loss of credit rating.

I've read some claims that this coin trick won't lead to hyper-inflation, but I just don't buy it. Maybe it's that I don't understand the complexities of the economics, but it sure seems like a bad idea from a monetary policy standpoint.