1586486914-Morris.qxd:1586484141-fm.qxd
11/26/08
9:10 AM
Page 87
CHAPTER 5
A Tsunami of Dollars
S
eigniorage was the collection of rights possessed by a feudal lord over his tenants, including, tradition has it, first dibs on bedding the peasant girls on their wedding nights. In the realm of money, the term referred to the sovereign’s ability to debase his coinage. By setting the value of coins somewhat higher than the precious metal they contained, he made a profit on each coin. Seigniorage in the modern era refers to the persistent overvaluation of a reserve currency. When France’s Charles de Gaulle complained bitterly of dollar seigniorage in the 1960s, however, he was thinking more in terms of lords forcing themselves on young maidens, for Americans were exploiting their privileged position by taking over French industry on the cheap. The American dollar’s status as the world’s reserve currency was officially confirmed by the Bretton Woods agreements after World War II. Reestablishing functioning currencies was a first-order priority for reviving the economies of war-ravaged 87
