No, this isn't what happened to your great uncle when he used to wander around the neighborhood without any pants on, mumbling about Jimmy Carter.
Seigniorage has to do with the value of money. Specifically, the term applies to the difference between the face value of money and the cost of producing it. Once upon a time, the government actually made a profit on this difference. Like, if a king minted a 10 denarius coin, and that coin only cost 2 denarius to make, then the king just created 8 denarius of buying power.
The way currency is made and regulated is more complicated now than it used to be, when people mostly went to the bathroom outside and took advice from doctors who talked about "humors." Seigniorage doesn't operate in that straightforward way anymore (at least not in developed economies with central banks).
But, in a broad sense, seigniorage still describes the difference between the face value of money and its production cost. If a hundred-dollar bill costs three cents to make, then the seigniorage for that bill becomes $99.97.
Sometimes, the seigniorage can be negative. Pennies used to contain a lot more copper. But copper got expensive enough that the melt value (the amount you could get by melting the coin down to its component parts) was higher than $0.01. Until the 1980s, the penny was 95% copper. However, in 1982, the government switched over to a copper-plated zinc composition...meaning current pennies are 97.5% zinc and only 2.5% copper.
However, the seigniorage for the penny still remains negative. It costs approximately two cents (the exact amount changes with the price of the various components) to make a penny. So, warm up your hot pot. Time to get into the used zinc business.
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Finance: What is the U.S. Mint?4 Views
Finance allah shmoop what is the u S mint It's
this tasty sweet smelling plant that can be grown in
the united states So it's you know us mint But
it's not the u S Mint that would be this
place and these three places actually yeah there are currently
for mints in use one each in philly san francisco
denver in a west point So what exactly do they
do there Take mint plants and convert them into delicious
melt in your mouth treats so we can cleanse our
palace after a hefty meal at our favorite garlic filled
italian restaurant Well no not quite The u S Mint
is responsible for one hundred percent of our coinage That's
pennies nickels dimes quarters of this one Whoever that busty
woman is if it can be found in a change
purse It started out here or here or here or
here Well the u S Mint was created by congress
in seventeen ninety two when our forefathers realized that there
was no way to make any of the jukebox is
work So yeah we needed small change because well back
in their day pretty much the only thing that cost
over ninety nine cents was a thirty foot yacht or
a trip around the world on a mule so we
needed something other than paper currency that started at a
dollar And while the u S Mint was born well
the mints use precious ish medals but not so precious
that they're not willing to melt them and crush them
and form them into likenesses of dead presidents Well the
medals are fed through a series of fancy machines until
coins pop out on the other end Well typically the
quarters and dimes and so on that we use on
a semi regular basis but sometimes also commemorative coins Yeah
that's included in there too Well like when the country
turns two hundred years old when we want to recognize
an important person or event from history or when you
know workers that the men are bored of coining aeneas
Now this is all what they do Additionally there's a
facility at fort knox where all of the u S
Bullion is stored and no gold and silver bullion not
bullion Birbal yang's you difference in french but don't get
any crazy ideas about robbing the place That would be
like while trying to break into fort knox common misconception
the mint doesn't print paper currency that would be under
the purview of the bureau of engraving and printing which
will also put your loved one's name on a champagne
flute for just twenty nine ninety five So yeah the
u S mint does coins The bureau does dolla dolla
bills right Those annual crosstown softball cames really gotten pretty 00:02:31.958 --> [endTime] fierce
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