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<p>[QUOTE=&quot;mrbrklyn, post: 184773, member: 4381&quot;]BTW - for what it is worth, you have me digging now to understand this better, and what I was talking about, how money gets into the economy via prime rate lending is EXACTLY legal seigniorage, at least according to this source.</p><p><br /></p><p>---------------------------------------------------------------------------------------------------</p><p><br /></p><p>Further discussion</p><p><br /></p><p>Ordinarily seigniorage is only an interest-free loan to the issuer because when the currency is worn out the issuer buys it back at face value thereby negating the revenue earned when it was put into circulation. Currently under the rules governing monetary operations of major central banks, seigniorage on bank notes is simply defined as the interest payments received by central banks on the total amount of currency issued. However if the currency is collected instead of being returned to the issuer the back end of the deal never occurs.</p><p><br /></p><p><a href="http://en.wikipedia.org/wiki/Seigniorage" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://en.wikipedia.org/wiki/Seigniorage" rel="nofollow">http://en.wikipedia.org/wiki/Seigniorage</a>[/QUOTE]</p><p><br /></p>

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