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Economics

Seigniorage

The profit a government makes by printing money that costs almost nothing to produce.

Seigniorage is basically free money for the government, but printing too much causes inflation and can destroy trust in the currency.

It's like the government printing $100 bills that cost 10 cents in paper and ink, then using them to buy real stuff.

Real world: The U.S. makes several billion dollars a year in seigniorage because people around the world hold dollars as savings.

💡 Seigniorage is one of the hidden perks of having the world's reserve currency — but governments have to be careful not to abuse it.