You have to be able to back up all these promises (that's what money is: promise to deliver value to the bearer).

The first issue with printing out money is inflation: everybody may have paper money, but the supply of tomatoes has not increased. All you'll do by printing more money is that the price of the available tomatoes goes up, as the seller will want to sell to the person who wants to give the most money. When the seller wants to go to the bank to deposit the cash, he may find that transport has gone up, since the number of taxis has not increased. When taxi driver then goes to buy fuel, he may find that fuel has also gone up, since there has not been an increase in fuel supply. Fuel seller goes back to the market to find that tomatoes has gone up again this week. As this goes round and round, you'll have the current situation in Zimbabwe.

The second issue is that we cannot fool the world into loaning us money if we're not being more productive or making things of value (this is the privilege of a certain country whose currency is presently the world's trading currency, but arguably that position has been earned over the past century and half. Now if you're that country and you feel like pumping your contracting economy (and by extension saving the world economy from collapsing) by increasing the money supply, you'll find that there are people who will buy your promise for a small fee (interest), based on your previous history of paying/honoring your promise over time.

Since Nigeria does not plan to increase the supply of goods and services, and since it has really terrible trust in the global scene, it has no business printing more currency

PentiumPro:


You write very good English but yet very deficient in basic economics

Good english? Really, teacher? Like but yet Now, I understand.

There needs to be a demand for the money - US and the UK print money but they get away for it due to worldwide demand for the money. Both countries national debts are in the trillions through all the money they borrow from their central banks!

Nigeria couldn't do the same because there would be no demand for the notes (you don't need naira to buy oil and that's all we export)

[img]
https://www.youtube.com/watch?v=UrJGlXEs8nI[/img]

Trendy247:
I will like to work in d printing room for just 1 week without pay

Nai b sey if u become politician Nigeria don empty b dat o

Trendy247:
I will like to work in d printing room for just 1 week without pay

thief. Lol

Trendy247:
I will like to work in d printing room for just 1 week without pay

thief. Lol fear God

Where is missy89 (olodo of the 21st century) that said a country can just be printing money anyhow ?

When you back the anglozionist empire blindly, this is what happens. The U.S has been priting money and nothing is backing the money except war with less armed countries. At least war is backing it and what does it do. Regime change in countries that go against dollar. Well, Russia is finally setting up a final answer to all the regime changes.. So nothing will be backing the dieing Fiat dollar.

Dollar can only survive in a one world order which CHina and Russia is Challenging and will eventually win. All the systems using dollar will default with the U.S dollar. Nigeria needs to change the petro-dollar on time before it's too late.

The anglozionist empire is going down and petro-dollar is also going down.

A country cannot just continue to print money so as to be rich because if She does, it will lead to hyper-inflation.
The volume of money in circulation must only be for the available products within the market space.

What primary class are you?

Please Seun should put age limit to registration on nairaland as 13 years and above like Facebook.

Forget what the economists would tell you about deflation inflation.If a country has modalities in place a country can print as much money as she feels like and escape with the consequences,pre-modern era China was doing this alot...If you have the " productivity potential " you can print money using your nation's productivity as a temporary flex why you print money to shock the economy.

Can Nigeria do this...No We are not productive and don't have shock absorbers in place when the ball comes rolling..

This is my own economic thought..

But contrary to mine,the school of Economics teaches money as aa by-product or the after-math of productivity wwhich means it is a legal tender you receive in exchange for services renderred,now with this definition in mind,you want more money dont think printing think about increasing productivity...

May God help us

Back to work...

You ever heard of Hyperinflation?Hyperinflation is an extremely rapid period of inflation, usually caused by a rapid increase in the money supply. Usually due to unrestrained printing of fiat currency.

Georgry:
Hello Nairalanders....

Knowing fully that a country have the right to print money as much as they desire,and their is no limit to the quantity of money a country can print, this question comes to my mind:

Why can't a country just keep printing money to the stage that it will be enough for every body in the country to be rich...


Economist in the house your explanation is needed here.....

Printing money to solve economic woes is voodoo economics...

You just need to tackle the issues that resulted in the economic downturn...
Most economists suggests austerity measures...
Maybe raising taxes, regulations etc but Printing more money ain't one of them...

Do you doubt me Ask Robert Mugabe of Zimbabwe

And by the way like i always say you want any state,nation,association to grow put someone with an " Economic Mind " and you will see growth soar through the roofs,Most old time pastors have confirmed this from Bill Bright and so on,they said they entrusted their ministries to People in business field and they experienced astronomical growth in financial worth...

..Good Will,honesty,diligence,even prophetic,evangelistic,truthfulness is good.But increase is a product of intelligent carefully planned and executed follow-through with thorough application of principles to produce an expected outcome..

.. In short i mean a thorough hand at work is better than all the good wills when it comes to economics...

Consider the case of the Nigeria. Let’s suppose the Nigerian government decides to print out money and then share Abacha's loots recovered by crediting 5million naira to every man, woman, and child into their bank account. What would people do with that money?

Some of that money will be saved, some might go toward paying off debt like mortgages and credit cards, but most of it will be spent. I know the first thing I’d do is go down to Jumia online and buy an Xbox or PlayStation 2 .

I’m not going to be the only one who runs out to buy an Xbox. This presents a problem for Jumia. Do they keep their prices the same and not have enough Xboxes to sell to everyone who wants one, or do they raise their prices?

The obvious decision would be to raise their prices. If jumia (along with everyone else) decides to raise their prices right away, we would have massive inflation, and our money is now devalued. Since we’re trying to argue this won’t happen, we’ll suppose that jumia and the other retailers don’t increase the price of Xboxes. For the price of Xboxes to hold steady, the supply of Xboxes will have to meet this added demand. If there are shortages, certainly the price will rise, as consumers who are denied an Xbox will offer to pay a price well in excess of what jumia was formerly charging.

This will lead to more money purchasing fewer goods. That's What everyone calls INFLATION.

HOPE I HELPED WITH MY ANALYSIS?

Georgry:
Hello Nairalanders....

Knowing fully that a country have the right to print money as much as they desire,and their is no limit to the quantity of money a country can print, this question comes to my mind:

Why can't a country just keep printing money to the stage that it will be enough for every body in the country to be rich...


Economist in the house your explanation is needed here.....

You don't need an ECONOMIST to explain that to you, you only need a JSS student who listened in class and read their economics book to explain it to you.

According to Jhiganh perspective, We listen n dance to Taye currency the fuji maestro's song for one reason or other. The day Kehinde currency emerge/surface n'ile agodo; ojo yen ni Taye ti jetan.
But gaskia........






































Iya kii je omi obe; Mi o gbodo suffer!!!

coolzeal:
Monetizing the debt is what we call it when governments try to print money to pay their debt. This doesn't work because of the effect monetization has on inflation. As they print more money, each issue becomes less valuable.

Debt monetization is not the same thing as “printing money” but it has many of the same effects.

Debt monetization describes the process of turning Treasury debt and private corporate debt into money. Simply stated, this happens when the Fed buys Treasury and corporate debt on the open market.

When the Fed buys debt in the market its purchase increases the money supply.

During normal economic conditions the Fed will buy and sell debt to manage interest rates. When they buy debt and increase the money supply, interest rates should fall. Conversely, if the Fed sells debt, interest rates will rise.

The Fed may want to raise interest rates to keep the economy from overheating and it may want to lower rates to stimulate a sluggish economy.

During the credit crisis the Fed had had to buy an unprecedented amount of public and private debt to keep rates low. This process is sometimes referred to as quantitative easing and is ostensibly a temporary strategy that will be rolled back when the crisis eases. Eventually, the Fed would like to get the debt they hold back into the market, which theoretically would reduce the money supply by demonetizing the debt.

The Fed needs to buy this debt because the private money markets are unwilling or unable to do so in the quantities necessary at desired yield levels. Private companies have low value debt they need to get off their balance sheets and the U.S. government needs to have money to fund a budget that is in deficit. If the Fed did not buy the debt, yields would rise and it could significantly postpone economic recovery.

This presents a series of very unusual questions for investors. The Fed is essentially the largest market participant and they have clear stated objectives about where they want prices and yields to go. Should individual investors bet against the Fed? Is the Fed taking on too much risk? How do individual investors hedge this risk or take advantage of another potential bubble?

In the next article in this series I will discuss what the known risks of the Fed’s strategy are and some ideas individual investors can use if things don’t work out as planned. Ultimately, individual investors need to be flexible, educated and aware of what is going on around them. We can’t forecast the future but we can prepare to take advantage of market changes when they do happen.

Pheals:
print watin .... Go back to history the illiterate abacha keep printing money when no country get crude oil from us ... He dey print amh pack go house ..what end it ? .... We can print it but the feature is " it must be scarce " so that it can have value. Op u understand now

stopped at urs it must be scarce so that it can have value ...others just dey confuse the Op.

herbie27:
How?.

we will not depend on FOREX again since we can produce everything locally and other countries will be begging for our goods and currency just like america infact we will be the richest country in the world.

OP! THIS IS A VERY GOOD QUESTION AS AM SURE THIS SAME QUESTION WILL BE LINGERING IN THE MINDS OF SO MANY ECONOMIC ILLITERATES.

FIRSTLY, INCREASE IN CURRENCY WITHOUT A CORRESPONDING INCREASE IN PRODUCTION DOES NOT MAKE A COUNTRY RICH.

RICH IS DETERMINED BY THE LEVEL OF OUTPUTS.
INCREASE IN PRODUCTION AND EXPORTATION ARE THE YARDSTICK TO COUNTRY RICH AND GDP GROWTH.


STILL JECLY

Hisduchess:

buh can't I take the money angry travel to another country to spend it when it has been changed.sorry pls explain to me I hated economics during my secondary school days thus I went for sciences. thanks in advancr

You can't travel with the currency to another country. You will need to exchange it and get the currency of the country you wanna travel to. But like the case of Zimbabwe, they don't have foreign reserve (foreign currency like USD,Euros, GBP, etc. in their reserve)so, you can't even change the money.

PentiumPro:


You write very good English but yet very deficient in basic economics

so also you might suffer efficient in basics science. Remember everybody have their area of specialization

Trendy247:
I will like to work in d printing room for just 1 week without pay..


Modified:
I believe if I keep the over printed bundles in my possession, it won't cause inflation

u will become poor than church rat! People wrking their wear pucketless transparent cloths with heavy security present. Kobo can neither follow u in nor out.

bookface:

Suppose, the CBN choose to give the 10 billion notes to just 10 people, would this cause inflation? The answer is no!

Are you kidding? In Nigeria? You give 10 billion to 10 people, they will spend it on fancy real estate, jets, and mistresses, raising the prices of these goods and services for the rest of us. They will give some of that money to their wives and daughters, who will use it to indirectly raise the price of Brazilian hair, heels, and shawarma, which will cause runs girls to raise their prices. Their sons will also get some of that money and use that to raise the price of watches, ciroc and other weekend flexing tinz.

And this being Nigeria, the police will find a way to increase their bribe, er, mandatory daily taxes, which as everyone knows, is a large component in the cost of tomatoes. So when our billionaire guy wants to throw his next monthly owambe, he will be shocked to find that the jollof rice budget more than tripled

What you describe is not completely off the plate like you may think. The concept is valid and used in a strategic manner (though not as careless as you suggest). There's a limit to printing money and some people have talked about inflation on this thread. If you want to understand the fundamental concept, then read about Quantitative Easing. It's not rocket science and believe me, I'm a physicist!

In addition, another capacity that must be in place prior to the decision to print more money is the government's ability to track money supply I.e. M0, M1 and M2...as accurately as possible. Without this, there would be more chaos created.

johnsonjosbles:
u will become poor than church rat! People wrking their wear pucketless transparent cloths with heavy security present. Kobo can neither follow u in nor out.

That's true my brother, but don't forget this is Nigeria

Print more money and it would lose its value. The issue is not with the printing but what that printed money can buy. You can't use local currency abroad to import in an economy such as ours. You need dollars which is in short supply. You cannot print dollars cause its not your currency. You can only try to equate it to the dollar rate but at your own risk

Some economist can lie sha! Though i'm not an economist but what if CBN prints more money to fix the following:

- Refineries
- Power Sector
- Security

These three things are my agenda to transform our economy

So the materials for printing and the manpower for production falls from heaven ni?

The answer is Inflation.
You see, the currency notes that we use do not have any intrinsic value. They only have exchange value. That means a N10 note does not actually mean its value is N10 but it means you can exchange it for goods/services worth N1. That's why its called a legal tender (means you are authorized by law to use it for exchange).

How does the currency system work?
Consider a hypothetical country with no foreign transactions for the time being. Assume there are just 10 people in it and each have N10 each. There are various goods that are produced in this country by these people. But whatever be the value of resources/costs incurred by them, these goods can be exchanged for just the 10, N10 notes present in the currency system. That means the sum of value all the goods and services produced in an economy is equal to the 10, 10 notes.

Therefore, sum of value all goods and services produced and exchanged = sum of all the currency present;

Now, the central bank is unhappy that the people just have N100 worth of money and decided to give each person an additional N10. That means there are 20, N10 notes in the system. But the goods and services that are produced do not change. Alas, the additional N100 that was supplied could not buy any more goods than the ones already present. So the exchange value of each good/service increases. Thus, applying the above formula, the goods and services produced in the second scenario will now be exchanged for 20, N10 notes reducing the buying power of each N10 note.

This my friend is called inflation and no country likes it. Almost every country knows it. Well some don't, countries like Zimbabwe which printed a whole lot of notes thinking that people will have more money. What in turn happened was even a single egg ended up costing thousands of Zimbabwean dollars. There was an inflation of 70 billion percent and even then the central bank kept printing 100 billion dollar notes (did they think everybody will become a billionaire lol?)

Trendy247:
I will like to work in d printing room for just 1 week without pay..


Modified:
I believe if I keep the over printed bundles in my possession, it won't cause inflation

It will lead to what we refers to as "Externality Effect" in the area you're located; due to your high spending capacity.