"Even if you took literally every single ounce of platinum in the world, it still wouldn’t add up to enough needed to pay down our nation’s debt."
National Republican Congressional Committee on Wednesday, January 9th, 2013 in a press release
NRCC compares the nation's debt to all the word's platinum, takes aim at trillion dollar coin
According to the National Republican Congressional Committee, President Barack Obama, U.S. Rep. Ann McLane Kuster and other Washington Democrats have a platinum target on their backs.
That's because some economists and legal scholars say Obama -- and, by extension,other Washington Democrats could solve the nation’s debt limit problem by taking advantage of an obscure law to mint platinum coins, which Obama could use to offset the debt and avoid a standoff with House Republicans over spending cuts. Under this theory, as little as an ounce of platinum could be used to mint a coin with a denomination of $1 trillion.
Neither the White House, nor Kuster, the target of a recent attack by the GOP congressional group, have commented on the matter. But, according to the Republican campaign committee, not even all the platinum in all the world could solve America’s spending problems.
"Heard of that trillion-dollar platinum coin Democrats want?" the congressional committee said in a press release issued Wednesday, January 9.
"Well, even if you took literally every single ounce of platinum in the world, it still wouldn’t add up to enough needed to pay down our nation’s debt," the release stated."Yet President Obama and Washington Democrats like Ann McLane Kuster continue to support policies that bankrupt our country."
The NRCC's point is a bit silly because that's not what economists are proposing. But just for fun -- and a chance to leaf through the pages of "A History of Platinum" -- we decided to check it out.
To be clear: We are not making a Truth-O-Meter ruling on whether Obama can do it or whether the strategy would succeed. We are simply addressing the NRCC's comparison of the total amount of platinum to the federal debt.
Is the NRCC right? We decided to check the scales.
First, let’s get a few calculations out of the way.
As of January 9, the date of the NRCC statement, the national debt stood at $16.432 trillion, according to the U.S. Treasury Department.
That same day, the price of platinum was listed at $1,583 per troy ounce, according to Platinum Today, a website (Troy ounces are the unit of measurement used to measure precious metals).
By those numbers, it would take approximately 10.38 billion troy ounces of platinum to pay off the debt.
So, has the world produced that much platinum? We decided to check the records.
According to the Platinum Metals Review, a publication by Johnson Matthey PLC, a London-based precious metals company, 130,715 million troy ounces were supplied between 1975, the first formal records available, and 2006. And more recently, mines supplied 36.935 million ounces from 2007-2012, company records show.
That brings the total of platinum mined since 1975 to 167.65 million ounces -- less than 1/60th of the 10.38 billion needed to pay off the debt.
Numbers prior to 1975 are harder to track. Johnson Matthey, the industry group, didn’t keep formal records on platinum production before that time. Thankfully, historians Donald McDonald and Leslie B. Hunt offered some thoughts on the matter in their book, "A History of Platinum."
According to the book, referenced on the Johnson Matthey website, two countries -- Columbia and Russia -- supplied most of the world’s platinum through most of the 19th Century. But, in 1888, explorers discovered platinum deposits in the ore mines of in Ontario, Canada.
Between 1902-1919, companies mined about 33,000 ounces of platinum from the mines. And by 1929, that number increased to about 300,000 ounces per year of platinum, along with the five other metals known as the Platinum Group Metals.
Elsewhere in the world, explorers discovered the Merensky Reef in South Africa in 1924, and over the years it became the world’s largest source of platinum. By 1938, the amount produced from the Merensky Reef reached 25,000 ounces per year, and by 1955, that number reached 200,000 per year, and in 1973, it exceeded 1 million ounces, according to the Platinum Metals Review.
This steady increase in production makes the numbers difficult to track. But, for argument’s sake, let’s use some very generous numbers and say all the mines across the globe combined to supply 1 million ounces of platinum each year back to 1902 -- far more than most estimates.
That would add 72 million ounces to the total 167.65 million tracked between 1975-2012, and the total production dating back to 1902 would then reach 239.65 million troy ounces.
That total, priced at the $1,583 per ounce, the Jan. 9 rate, would equal about $379.365 billion in value -- still less than 1/40th of the $16 trillion debt figure. Even doubling the 167.65 million figure from 1975-2012 (335.3 million ounces) would leave the total value of platinum at $530.779 billion -- still less than 1/30th of the debt. And pricing that 335.3 million ounces total by $2,280, the market’s 20-year high from March 2008, the total ($764.484 billion) would still fall more than $15 trillion short.
There are no formal counts of platinum production dating back before 1975, but based on recent records and historical accounts, there is no evidence to suggest the value of the world’s total platinum supply comes within reach of the national debt.
Records from Johnson Matthey PLC, an industry leader, show that 167.65 million troy ounces were supplied between 1975-2012, and historical records indicate that number far exceeds the amount mined in the years prior.
Even by the most generous counts, the total value of the the world’s platinum supply is only a fraction of the national debt. We rate this claim True.