When one country holds another country's currency it is giving that country the right of seigniorage. When the seignior fails to support its currency with national productivity the value of the currency falls. As the currency’s value falls the country's seigniorage diminishes. In the limiting case, the seigniorage vanishes because the value of the currency goes to zero.
When the US$ is the world's reserve currency it means the US is the seignior to the world. Those who are complicit in financializing and de-industrializing America are helping to accomplish it by stripping America of its seigniorage.
No comments:
Post a Comment