Could America’s financial future hinge on a $1 trillion coin?

The above question, if asked several years ago, would be dismissed as pure lunacy. Yet a number of economists and politicians have floated such an idea in recent weeks, following an unexpectedly acrimonious debate over the so-called fiscal cliff that nearly sent the U.S. economy reeling.

The proposal, touched upon by The New York Times' Paul Krugman and U.S. Represenetative Jerrod Nadler of New York, would see a platinum coin created by the U.S. Mint with a value of $1 trillion. This new currency would then be deposited at the Treasury Department, which could theoretically use its worth to backstop a slew of debt issuances in the coming years.

"There is specific statutory authority that says that the Federal Reserve can mint any non-gold or non-silver coin in any denomination, so all you do is you tell the Federal Reserve to make a platinum coin for 1 trillion dollars, and then you deposit it in the Treasury account, and you pay your bills," Nadler was quoted as saying in an interview on January 2.

Adding to the idea, Krugman, in a recent blog post for the Times, reckoned that it would be more reasonable for the Obama administration to produce a high-value coin than to continue dealing with House Republicans. However, considering that the House of Representatives is enabled by the Constitution to effectively "control the coin purse" of the United States, one could see where such a proposal may quickly devolve into contentious argument.

Though only days old, this story may be only the first of many "alternatives" to a comprehensive debt-reduction plan. Regardless, Americans who have a financial stake in stock or equity markets, particularly those with retirement accounts, should consider their economic futures as they invest. For more information about effective methods of wealth preservation, visit today.