The Fiscal Cliff is getting all the hype, but the real story may be the Debt Ceiling, which will be hit sometime early next year.

It's possible that a Fiscal Cliff "deal" will resolve the Debt Ceiling at the same time, but there's no guarantee of that, and the rhetoric coming from the GOP right now is that they intend to play hardball. Today Senator Corker hinted that there's going to be another big fight.

The Weird thing about re-fighting the debt ceiling hike is that everyone HATES what came out of the 2011 standoff. Nobody likes the sequester (the mandated spending caps that will kick in next year) and yet there's an appetite to try the same stunt again.

Back in 2011, there were two ideas that were floated as ways for Obama to avoid defaulting if the Debt Ceiling didn't get raised on time.

One was to invoke the 14th amendment, and just ignore Congress.

Section IV of the 14th Amendment states:

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

So in other words, Obama would just say: Sorry, we have an obligation to keep paying what we owe, and the Constitution supersedes the debt ceiling law, which wasn't in the constitution.

The other possibility that was probably even more mind-bending was the Trillion Dollar Coin Idea, which originated with a reader of Cullen Roche's blog. The gist is that the Treasury is allowed to unilaterally mint platinum coins. It could create a $1 trillion coin, and deposit it at its account at The Federal Reserve.

It sounds completely crazy, but ... it's even crazier to think that the U.S. would default arbitrarily just because of a dumb law.

So if the choice is between default and a trillion dollar platinum coin, we endorse the coin all the way.

And we're glad to see people talking about it.

Jim Pethokoukis at AEI posts a note from Guggenheim Securities, which includes this as an option ...

4. Platinum Coin Option. This is even more theoretical than the Constitutional Option, though some argue that it is a stronger legal option. There are limits on how much paper money the U.S. can circulate and rules that govern coinage on gold, silver, and copper. BUT, the Treasury has broad discretion on coins made from platinum. The theory goes that the U.S. Mint would create a handful of trillion dollar (or more) platinum coins. The President would then order the coins deposited at the Fed, who would then put the coin (s) in the Treasury who now can pay all their bills and a default is removed from the equation. The effects on the currency market and inflation are unclear, to say the least. You would also likely trigger a wave of lawsuits similar to the Constitutional Option and create two tranches of treasuries. Both this option and the Constitutional Option are VERY low probability options.

We don't think this will happen, but ... the fact that analysts are talking about it is pretty remarkable.