Daniel Davies wrote:
So the USA in this world is only earning seignorage on one day's float. The amounts of money that any reasonable estimate of the size of this float might be worth, is just an order of magnitude smaller than the amounts of money that the USA is alleged to have spent protecting it.
The estimates I've seen of the benefits of seignorage to the US are quite small. For example, here's an excerpt from a 1999 talk <http://minneapolisfed.org/pubs/region/99-06/meyer.cfm> by Lawrence Meyer:
On the other hand, having an international currency can provide substantial benefits. The most direct benefit is seignorage revenue. With about $300 billion of U.S. currency notes in the hands of foreigners, the United States earns roughly $15 billion per year (less than 0.2 percent of GDP) in seignorage.
Doug
