From one of our subscribers in Mexico comes this humorous quote:
Instead of issuing gold certificates, a government converts gold into currency at the market rate by printing paper notes. A person exchanges one ounce of gold for its value in currency. They keep the currency for one year, and then exchange it all for an amount of gold at the new market value. This second exchange may yield more or less than one ounce of gold if the value of the currency relative to gold has changed during the interim. (Assume that the value or direct purchasing power of one ounce of gold remains constant through the year.)
If the value of the currency relative to gold has decreased, then the person receives less than one ounce of gold. Seigniorage occurred.