Is That A Platinum Coin In Your Pocket Or Are You Just Glad To See Me?

So, we're talking Trillion Dollar Coins, today.

Which, I can get into. I love bullion coins. Especially the ones you drop into a mug of hot water and they come out all chicken brothy.

Did you guys know that the U.S. Mint already sells Platinum bullion coins? It's true. I looked it up and everything.

The American Eagle Platinum bullion coins are uncirculated and come in one troy ounce (31 grams or so), one-half ounce, one-quarter ounce and one-tenth ounce weights. They are denominated in $100 (ounce), $50 (half-oz), $25 (guarter-oz) and $10 (one-tenth oz). They are not sold directly by the Mint to the public, but are instead sold to "Authorized Purchasers" (i.e. coin dealers and the like) who then market them for sale.

On the other hand, a Numismatic proof version of the platinum coin is offered to the public and can be purchased directly from the Mint. The current price of a $100 denominated one-ounce platinum Eagle is $1892.00.

The current spot price of platinum is $1627.00 an oz (as I type this...the price is set in a 24 hour market and is constantly in flux). The Gov't has a handy chart which they use to set the retail price of the gold and platinum proof coins they offer. For platinum, it basically guarantees a $250-350 profit/price over spot for the Mint on every proof coin they sell directly to the public.

So, want to know more? Too bad, I'm putting ya some more knowledge anyway. It's under the fold.

Now denominations on these coins are pretty meaningless. No one spends American Eagle bullion coins as denominated currency (although they could at a huge loss, I suppose). But, I wondered, what would it take in platinum resources for a One Trillion denominated bullion coin to remain at denominated parity with an existing one ounce, $100 denominated bullion coin? In other words, how many ounces of platinum would it take to make a face value One Trillion denominated coin that was valued like Mint values the already existing $100 per one ounce coin?

Well a One Trillion dollar coin is denominated at 10,000,000,000 times the value of a $100 one ounce coin, so you would need 10,000,000,000 troy ounces of platinum instead of one. That sounds like a lot. So I broke it down: There are 14.583 troy ounces in a pound. Divide 10,000,000,000 by 14.583 and you would need a coin that weighed approximately 685,730,959 pounds in order to preserve the same intrinsic value to denomination ratios in currently existing Mint platinum bullion coins. You're gonna need some deep and well-lined pockets to carry that thing around.

This figure is artificially high because the Mint sets a greatly discounted value on the platinum bullion denominations that essentially means that the denomination of one ounce of platinum at $100 is only 1/16 of what an ounce actually goes for in the precious metals market right now. If the Mint were to value one ounce of platinum at spot ($1600), your pockets would catch a break. You would then only need a coin that weighed 42,858,122 poundsto become your Trillion Dollar Baby.

Now, according to the numbers I could find, approximately 180 tons of platinum are mined each year. 180 x 2000 lbs= 360,000 pounds. So to make your full-value One Trillion coin, you would need all the platinum that will be mined on earth for the next 119 years. (Assuming current production rates stay the same, and reserves exist to support it. I couldn't find a good world reserve figure in the 30 seconds I spent Googling for it.) It is my understanding that the Moon and the Asteroid belt are stinking with platinum though, so if Obama does mint this thing, he'll finally have a reason (besides Muslim outreach) to support NASA's mission.

That's me...always seeing the silver lining in the platinum cloud. Anyway, just a little perspective on the platinum Trillion dollar coin thing.

In other news, I prefer my platinum to come in Blonde. So here is the only good thing to ever come out of New Jersey, Debbie Harry, singing a song off Blondie's Platinum Album (see what I did there?) "Parallel Lines."

C'mon...you didn't think I'd let you go unrewarded for making it through the math stuff, did you?

posted by Jack M. at 02:37 PM

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