Sometime in the next 24 hours we will be switching European Tribune over to a new layout. This will involve a little downtime and no doubt some teething troubles. Do not adjust your set. - Colman

Do you have examples of sovereigns' principal source of funding being collecting seigniorage through coinage issue?

Several leap to mind. I believe the King of Macedonia had at least one silver mine, the product of which his mint turned into coins. Similar for King Midas and at least some of the revenue of the Hapsburgs derived from coinage of precious metal mined from their own mines. In a time when most transactions were barter and/or feudal tribute these counted for a very significant part of the money supply, especially the 'store of value' part.

The Spanish kings famously brought back precious metals from the colonies, what they didn't use to pay for exports from China via Manila, thence to Acapulco, etc. This factor was sufficiently important that, when Raleigh intercepted the shipment one year, the booty, it has been argued, produced a boom in England.

Likewise, the early accession of California and Nevada as states to the USA and the need and urgency of the transcontinental railroad was justified on the basis of the perceived value of the gold and silver they produced. While the Civil War was financed mostly by greenback dollars, precious metal was seen as important for assuring the value of those dollars, especially to foreign counterparties.

Today it is reported that almost all gold mined in China is kept by the government to build Chinese reserves. That said, it is highly unlikely that China would consider resumption of even a gold reference standard.

One amusing suggestion for dealing with the 'fiscal cliff' has been that Geithner use a section of the code dealing with the authorization of the Secretary of the Treasury, via the Mint, to mint coins of any value in platinum. Thereby he could mint a $1 Trillion dollar coin, drive over to the Fed, deposit it in the US Government account and then the government could write checks on that deposit as opposed to increasing the national debt. A coin a year for a few years could pay for quantitative easing for the public, which, if done along the lines Steve Keen suggests - requiring that such money be used first to pay down debt - would resolve the debt crisis. I would suggest minting $1 million dollar platinum coins to sell as status symbols for the wealthy. No lady should go out without a $1 million coin somewhere on her person.


As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jan 6th, 2013 at 11:40:11 PM EST
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