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<p>[QUOTE=&quot;Shortgapbob, post: 234160, member: 6088&quot;]Alright, let me see if I can help this a bit. </p><p>&nbsp;</p><p>Firstly, seigniorage is the net revenue gained from some institution, often governments, issuing money.&nbsp; For our concerns, there are two primary parts to consider.</p><p>&nbsp;</p><p>The government makes a profit when it issues a currency that has a face value of more that the cost for the government of producing that unit of currency.&nbsp; For example, if a quarter costs only $.05 each to produce and distribute, then the government is making $.20 on each quarter.</p><p>&nbsp;</p><p>However, the government is also responsible for retiring the currency from circulation.&nbsp; So, if after years, a quarter is worn out and sent back to the mint, the banking authority essentially has to &quot;pay&quot; the bank returning the worn out quarter with a new quarter.&nbsp; By purchasing the coin back at face value, the central banker sees its earlier seignoirage profits negated.&nbsp; The issuing of currency almost acts as an interest free loan when retired in this manner.</p><p>&nbsp;</p><p>With the Statehood Quarters, the government planned (and correctly) on many individuals collecting and hoarding these coins.&nbsp; Therefore, these coins are never retired, allowing the government to retain its profits from the production of these coins.&nbsp; If the coins do not circulate, then the government does not have to buy them back, and maintains very hefty profits from seignoirage.&nbsp; Estimates have the US Treasury earning over 5 billion so far from these revenues.[/QUOTE]</p><p><br /></p>

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