Santa Clarita Living

Seigniorage, a word unknown

by admin on 28/04/09 at 12:47 pm

Seigniorage is not a word is explained to us every day.
Around it will create several controversial but often are not taken into account.
I will only give a definition of this term that could be used later, perhaps in my other articles or you can hear it in the future.
The information that I found on this are not many, but investigating a fund you can find several articles and video.
The delivery system of money in the past worked well:
For every dollar paid out they needed a gold reserve to cover the disbursement of this money, because it was not in operation on the course and forced there to be able to change money with the gold going into the bank.
In the 70s, however, Nixon introduced the course forced, as the currency in circulation was too much compared to gold.
Only reason why $ 100 value $ 100 is the fact that we agree to that piece of paper worth $ 100.
Since then every issue of money is covered in part with the gold reserve and partly by issuing state bonds (debt).
But if the notes are why our debt?

Because in truth the banks are not government, but real companies.
They print money and LEND it to the state in exchange for securities (debt).
Then print a sheet from 0.05 cent (for example), but with a value of $ 100, and lend us generating debt.
The payment of this debt the bank will get $ 100 + interest – 0.05 cent.
Warning:
does not mean that all the debt is with the printing of banknotes, because inside there is the debt for public spending.
Understand this mechanism if we make appropriate notes in the portfolio, we can see that the ownership of money is not ours.
Top notes you can find the logo ECB, while on the coins minted by the Mint was not there are signs of the bank.
So here also explains why it is preferred to use up to 2 coins in Euro currency.
If they were printed in the paper would contribute to further increase the public debt.
Warning:
The bank decides monetary policy in relation to the economic policy of the states.
So the issue of banknotes is controlled, but the gain is banking that I have mentioned before.
This gain is called Signoraggio.
As the bank a private credit institution and has generated income is taxed and partly recovered by the state.
If you understand the system you may ask why we do not print?
Good question.
Starting from the history, it seems that since the beginning Roman is the state raised the cost of the printing press by giving to others, but UEL period coins were completely gold, and then for example:
100 coins in gold (20 grams of gold) worth 20 grams of gold that you had in your pocket and for which the value printed was equal to the value given in the system.
Over time, those who printed money have lightened the load of gold in the money and away from the real value and nominal value by separating the real one.
This until you comes to our times, in 1971 when Nixon completely block the exchange U.S. dollars gold.
Now we have discovered why not paintwork us, but why not go back to the old system (as do China and Cuba, which own banks)?
To this, I have not replied.
But we need a little ‘history.
Kennedy in 1964 tried to insert a coin and the state issued an order that allowed him, but unfortunately a few months later he was killed, and the measure was not used more, even if still in force.