Seigniorage

I just learned this word today. Do you know what it means?

"Seigniorage derived from specie - metal coins- arises from the difference between the face value of a coin and the cost of producing, distributing and retiring it from circulation." (1)

Why is this important? Have you heard of Rep. Mike Pitts, R-Laurens in South Carolina? He's proposed state legislation that would ban the "unconstitutional substitution of Federal Reserve Notes for silver and gold coin in South Carolina." (2)

He fears that the Federal Reserve Notes - our paper money - will lose value. Pitts said that if the federal government continues to spend money at its current rate, "our entire economic system is going to collapse."

That's some confidence in our monetary system.

He's given it a lot of thought, too. (2) Unfortunately, I'm not a monetary expert - I leave that to others to explain it to me so it makes sense. But whether his state will adopt the measure or not is unclear. But the dialog has gotten some attention.

Please see how he has considered this issue. (2)

sources
(1 - http://en.wikipedia.org/wiki/Seigniorage)
(2 - http://www.courthousenews.com/2010/02/22/24898.htm)