Grasping at Straws — Could a Platinum Coin Be Part of a Debt Ceiling Deal?
September 29, 2021
Grasping at Straws —
Could a Platinum Coin be Part of a Debt Ceiling Deal?
September 29, 2021
IT’S IMPOSSIBLE TO OVERSTATE the sense of anger on Capitol Hill — Democrats are furious with moderates Joe Manchin and Kyrsten Sinema, who won’t disclose what they want; Democrats are even more furious with Mitch McConnell, who won’t even help them on the terms of surrender.
THIS FOUL MOOD has prompted some Democrats to grasp at straws on the debt ceiling:
Kill the filibuster? Not gonna happen.
Give the Treasury Secretary authority to raise the debt ceiling? No votes for that.
Mint a trillion dollar platinum coin to pay for a debt ceiling hike? Don’t bet on it.
Impose the 14th Amendment to the Constitution, which allows a president to pay all debts? Unlikely but not out of the question.
THE MERE FACT THAT SOME MEMBERS OF CONGRESS are considering a platinum coin makes it clear that the most rational option — attaching a debt ceiling hike to a budget reconciliation bill — is now viewed as risky, because that could take weeks and the U.S. could be near default by the end of October (or sooner).
THE ONE MISSING INGREDIENT UNTIL YESTERDAY was an angry stock market, but Congress finally got that — which, Democrats hope, will prompt financial and business leaders to urge McConnell to relent.
A POTENTIAL IRONY: McConnell has dug in his heels on the debt ceiling because he wants the Democrats to take all the blame, but there’s a growing realization that McConnell himself is part of the problem, not the solution.
[OF COURSE, THE MARKETS FELL YESTERDAY not because of anything Janet Yellen or Mitch McConnell said. The big Wall Street story is rising interest rates as anxiety over an economic slump dissipates — thanks largely to a realization that Covid cases have leveled off.]
THE GOOD NEWS IN WASHINGTON THIS MORNING is that a government shutdown, which could hammer consumer and market psychology, still looks unlikely. We expect a deal, perhaps today, that will keep the government open until early December.
THAT’S JUST ONE OF THREE ISSUES TO BE RESOLVED: Frantic negotiations will continue on the debt ceiling, which McConnell insists must be addressed by Democrats (the dispute, frankly, is over the Democrats’ terms of surrender, not an easy task if there’s only three weeks before default).
IN THE MEANTIME, DEMOCRATS APPEAR TO BE HOPELESSLY GRIDLOCKED on the other big issue — passage of the two infrastructure bills. As always, we’ll carefully watch Nancy Pelosi today; will she schedule a vote tomorrow if House progressives have the votes to block her?
* * * * *
WE WATCHED MUCH OF THE REMARKABLE hearing yesterday on the Afghanistan debacle, and there was one clear take-away: the Generals clearly wanted to keep a small force on the ground, and repeatedly urged Joe Biden to not withdraw precipitously. Biden has said he never got that advice and — quite clearly — he’s not telling the truth.
AFTER FOUR YEARS of Donald Trump’s outrageous mendacity, there was hope earlier this year that Biden would be different. But when cornered this summer, Biden dragged out the slippery phrase “not to my recollection” — which speaks volumes about his willingness to twist the truth.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2021 AGF Management Limited. All rights reserved.