Ok, well sort of. The consequences of seigniorage are afforded to those that spend the money earliest, including borrowers if the money borrowed is newly create

Ok, well sort of. The consequences of seigniorage are afforded to those that spend the money earliest, including borrowers if the money borrowed is newly created money. However, the borrowers are paying for that privilege. And everyone else is paying for that privilege down the line. IE the borrower pays interest well in excess of any seigniorage realted benefits, the people or companies he pays with that loan money are selling things to him at a lower rate than they should based on the increased money supply (becuase that information takes time to propagate through the market), so when they spend the money, they have already been taxed. But most banks aren't the originator of that money. The Fed creates money, all other banks lend it out which causes a money multiplier effect. However, the money multiplier doesn't actually affect prices directly - beause most of that money are deposits, ie they're not being used. Money only leads to price inflation when its spent. Banks gain seigniorage by having first access to money lent out or spent by The Fed. If they need extra money to cover for too little deposits, The Fed is there to give those banks below-market-rate loans. If the government needs to borrow more money and banks don't have enough to buy the bonds, The Fed will buy bonds from banks at above market rates so those banks can buy more bonds with the money they get back from that. That's where the seigniorage happens. There are also financial institutions that banks give benefits to (cheap loans for example). Those financial institutions also benefit from seigniorage by getting those cheap loans. Ordinary people aren't getting cheaper loans tho. If anything, the monetary inflation pushes loan rates up, even as nil resere requirements and a low discount rate have pushed them down.