The seignorage benefit is real; it's just out of proportion to the amount of money the US spends on maintaining global hegemony. For example, the US appears to have spent eight or nine years' worth of seignorage on the Iraq war so far. Being a global hegemon has all sorts of economic benefits, but seignorage isn't one of the big ones.
-----Original Message----- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Devine, James Sent: 26 February 2005 16:46 To: PEN-L@SUS.CSUCHICO.EDU Subject: Re: Oil & dollars Doug writes: 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. comment: I'd say that marginal gains can sometimes be crucial. Further, while the benefits of seignorage have fallen over time, from a high after WWII, they are accumulated and allow the collection of interest, so the total benefit may be quite high. (They'd be lower now than in 1999, since the Euro has come in.) JD
