Disclaimer: I used to manage a precious metals trading firm, so I know something about the metal trade, but I am out of that business for a year now and my information might be somewhat suspect.
That said, recent suggestions that the President could side-step Republican resistance to raising the debt ceiling by paying down our debt at the Federal Reserve by minting a one trillion dollar platinum coin are totally ridiculous.
First of all, a $1 trillion platinum coin would weigh 39,000 pounds at current platinum prices. Very difficult to transport anywhere.
Secondly, the United States doesn't have any platinum reserves. We have gold reserves and silver reserves, but no platinum reserves. We would have to buy the platinum on the open market to issue a platinum coin.
Third, specie currencies such as hard bullion are priced according to the market value of the metal that the coin was struck on, not the face value 0f the coin.
Ergo, suggestions that we could offset the deficit by declaring the value of a one or two ounce platinum coin are wholly fallacious. That dog just don't hunt.
Suggestions that the Federal Reserve, a private corporation, would accept a coin worth around $1600 in lieu of $1 trillion worth of accumulated debt are simply fantastic and have no place in a serious discussion about the National Debt.
No currency is priced by the country that issues the currency. The value of a currency is established by international rates of exchange, and by nominal inflation rates. As we increase the money supply we decrease the value of the dollar, which results in an inflationary spiral.
Submitting a $1 trillion platinum coin worth around $1600 in exchange for $1 trillion worth of National Debt would effectively inject an additional $1 trillion worth of paper money into the economy, causing a significant amount of inflation at a time when inflation is the last thing we need.
More to the point, the Federal Reserve would not be obligated to accept the coin at face value since it's true value would be 1/39000th of its face value. Since the Fed could never resell the coin at it's face value, it could not in good faith accept the coin.
Remember, while we - the US Government mints coins and prints money - we do this per order of the Federal Reserve, not the other way around.
People who propose the platinum solution are either being whimsical or deliberately misleading the gulible into a dead end solution that solves nothing.