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Naija: Instead Of Dollars We Can Use Gold as FX - Politics - Nairaland

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Naija: Instead Of Dollars We Can Use Gold as FX by LikeAking: 9:58pm On Oct 22, 2023
Before I proceed I want to ask a question.

Why are international banks like HSBC, BOA,BOE,BOC,BOI, SA banks not operating in Nigeria?

I feel their presence is highly needed at this stage, may be they will bring in the desired FX into the country and also help their country men remit funds without converting to USD..

To the main topic.

Apart from dollars we can use gold to conduct foreign trades too.. At this stage we have to be innovative..

The good side of gold is it can’t be minted by any nation, etc So we are tied to the USA..

Make I explain well..

The reason the Naira is falling is not because of the small, small goods Okechukwu and Tochi Dey import from China… That’s a very small contributor..

The major contributors to our FX disaster are Foreign remittances of multi national companies and Nigerian companies , importation of raw materials, equipments, fuels, etc.

Not the basic goods we import..

1.So instead of importing fuel with dollars, we can import with gold. It will halt the rise of the dollar against the Naira. Our Arab brothers are using this trick to their advantage.

2. All foreign remittances, buying of raw materials, equipments etc, must also be don via gold..

Abeg no ask me wia dem go get the gold from.

This will halt the death of the Naira and also create new opportunities..

Kindly add yours..

2 Likes

Re: Naija: Instead Of Dollars We Can Use Gold as FX by Varunpulyani: 9:59pm On Oct 22, 2023
How about Bola cocaine as a legal tender?

1 Like

Re: Naija: Instead Of Dollars We Can Use Gold as FX by Jenniestar: 10:05pm On Oct 22, 2023
Advisable??
Re: Naija: Instead Of Dollars We Can Use Gold as FX by LikeAking: 10:07pm On Oct 22, 2023
B4 $ “dollar” kill all of us..
Re: Naija: Instead Of Dollars We Can Use Gold as FX by MasterJayJay: 10:23pm On Oct 22, 2023
Which gold we get?

1 Like

Re: Naija: Instead Of Dollars We Can Use Gold as FX by Neckpresser101: 10:31pm On Oct 22, 2023
MasterJayJay:
Which gold we get?
Nigeria has gold especially in the north and some parts of the west
Re: Naija: Instead Of Dollars We Can Use Gold as FX by Birdbyrde440: 5:19am On Oct 23, 2023
LikeAking:
Before I proceed I want to ask a question.

We are international banks like HSBC, BOA,BOE,BOC,BOI, SA banks not operating in Nigeria?

I feel their presence is highly needed at this stage, may be they will bring in the desired FX into the country and also help their country men remit funds without converting to USD..

To the main topic.

Apart from dollars we can use gold to conduct foreign trades too.. At this stage we have to be innovative..

The good side of gold is it can’t be minted by any nation, etc So we are tied to the USA..

Make I explain well..

The reason the Naira is falling is not because of the small, small goods Okechukwu and Tochi Dey import from China… That’s a very small contributor..

The major contributors to our FX disaster are Foreign remittances of multi national companies and Nigerian companies , importation of raw materials, equipments, fuels, etc.

Not the basic goods we import..

1.So instead of importing fuel with dollars, we can import with gold. It will halt the rise of the dollar against the Naira. Our Arab brothers are using this trick to their advantage.

2. All foreign remittances, buying of raw materials, equipments etc, must also be don via gold..

Abeg no ask me wia dem go get the gold from.

This will halt the death of the Naira and also create new opportunities..

Kindly add yours..






Any President that tries this will die before 48hrs.
Gaddafi is a case study.

6 Likes

Re: Naija: Instead Of Dollars We Can Use Gold as FX by LikeAking: 10:12am On Oct 23, 2023
Birdbyrde440:



Any President that tries this will die before 48hrs.
Gaddafi is a case study.

Our problems plenty….

1 Like

Re: Naija: Instead Of Dollars We Can Use Gold as FX by Christistruth00: 10:15am On Oct 23, 2023
grin
Re: Naija: Instead Of Dollars We Can Use Gold as FX by Christistruth00: 10:15am On Oct 23, 2023
And Nigeria has Gold

I hear Nigeria has more Gold than Ghana that was named the Gold Coast

1 Like

Re: Naija: Instead Of Dollars We Can Use Gold as FX by Christistruth00: 10:17am On Oct 23, 2023
Birdbyrde440:



Any President that tries this will die before 48hrs.
Gaddafi is a case study.

Nothing will happen

Gold Almighty has always had our backs
Re: Naija: Instead Of Dollars We Can Use Gold as FX by GerogeI(m): 11:02am On Oct 23, 2023
LikeAking:
Before I proceed I want to ask a question.

Why are international banks like HSBC, BOA,BOE,BOC,BOI, SA banks not operating in Nigeria?

I feel their presence is highly needed at this stage, may be they will bring in the desired FX into the country and also help their country men remit funds without converting to USD..

To the main topic.

Apart from dollars we can use gold to conduct foreign trades too.. At this stage we have to be innovative..

The good side of gold is it can’t be minted by any nation, etc So we are tied to the USA..

Make I explain well..

The reason the Naira is falling is not because of the small, small goods Okechukwu and Tochi Dey import from China… That’s a very small contributor..

The major contributors to our FX disaster are Foreign remittances of multi national companies and Nigerian companies , importation of raw materials, equipments, fuels, etc.

Not the basic goods we import..

1.So instead of importing fuel with dollars, we can import with gold. It will halt the rise of the dollar against the Naira. Our Arab brothers are using this trick to their advantage.

2. All foreign remittances, buying of raw materials, equipments etc, must also be don via gold..

Abeg no ask me wia dem go get the gold from.

This will halt the death of the Naira and also create new opportunities..

Kindly add yours..





First our GDP is not insignificant, so we do not have forex issue cause if IOCs remittances, but because of a dumb Government, they have no idea of what a free market is. They floated the Naira against foreign currencies which is creating foreign currency demand, without floating foreign currencies against Nairà to create Naira demand in order to arrive at equilibrium pricing.

That's what you are calling IOC remittances. Basically, for you to float your currency, your exports should be in your currency. So foreign importers will approach your banks to get your currency in order to buy your items. They will have to haggle with your bank for an exchange. Basically your banks will be negotiating for more dollars for less Naira in order to make profit. That drives exchange rate in favour of Naira.

But now, we only have local importers going to ask banks for foreign currency, banks and bdcs must make money hence they will negotiate for more Naira for less currency. That drives the exchange rate against the Naira in a bottomless spiral without counter balance.

If you do not have demand for raw local currency, and demand for raw foreign currency in the market, float one of them is a stupid idea, cause there is no counter balance. It is not a free market. In the Current case, the exchange rate will not favour Naira even at 10,000 Naira to 1 usd it will still be sliding down against USD. The fall is bottomless, that why it's stupid plain and simple.



Why do we not have foreign demand for Naira, the Federal Government and politicians want easy access to USD. It makes money laundering easy. If you visit any ministry in Nigeria. Listen to the directors, they do not talk in Naira anymore. They are all dollarized. So just like Russia started selling oil in Rubbles, Nigeria must first sell oil and all other exports in Naira before floating the Naira. That's why past Govt. Maintained fixed exchange cause they want CBN to collect dollars for them. This one still wants CBN to collect USD, but wants to play with the idea of floating Naira to please western interest in devaluing African currencies to get cheap raw materials. Basically it was to buy for the controversial govt. Legitimacy in the eyes of the West.


Only countries with huge manufacturing like China, or Germany can benefit from currency devaluation. Like
you said, Raw materials exporters like us are better of with commodity based currency like gold, which the West have carefully killed since colonisation. If you use any commodity as money, it is resource based economies like Africa that benefit. If you use paper based manipulative currency, the technology based economies like West Benefit.


This warped decision on floating is my only reason to believe that Tinubu was never an accountant.

10 Likes

Re: Naija: Instead Of Dollars We Can Use Gold as FX by Dsimmer: 11:58am On Oct 23, 2023
GerogeI:


First our GDP is not insignificant, so we do not have forex issue cause if IOCs remittances, but because of a dumb Government, they have no idea of what a free market is. They floated the Naira against foreign currencies which is creating foreign currency demand, without floating foreign currencies against Nairà to create Naira demand in order to arrive at equilibrium pricing.

That's what you are calling IOC remittances. Basically, for you to float your currency, your exports should be in your currency. So foreign importers will approach your banks to get your currency in order to buy your items. They will have to haggle with your bank for an exchange. Basically your banks will be negotiating for more dollars for less Naira in order to make profit. That drives exchange rate in favour of Naira.

But now, we only have local importers going to ask banks for foreign currency, banks and bdcs must make money hence they will negotiate for more Naira for less currency. That drives the exchange rate against the Naira in a bottomless spiral without counter balance.

If you do not have demand for raw local currency, and demand for raw foreign currency in the market, float one of them is a stupid idea, cause there is no counter balance. It is not a free market. In the Current case, the exchange rate will not favour Naira even at 10,000 Naira to 1 usd it will still be sliding down against USD. The fall is bottomless, that why it's stupid plain and simple.



Why do we not have foreign demand for Naira, the Federal Government and politicians want easy access to USD. It makes money laundering easy. If you visit any ministry in Nigeria. Listen to the directors, they do not talk in Naira anymore. They are all dollarized. So just like Russia started selling oil in Rubbles, Nigeria must first sell oil and all other exports in Naira before floating the Naira. That's why past Govt. Maintained fixed exchange cause they want CBN to collect dollars for them. This one still wants CBN to collect USD, but wants to play with the idea of floating Naira to please western interest in devaluing African currencies to get cheap raw materials. Basically it was to buy for the controversial govt. Legitimacy in the eyes of the West.


Only countries with huge manufacturing like China, or Germany can benefit from currency devaluation. Like
you said, Raw materials exporters like us are better of with commodity based currency like gold, which the West have carefully killed since colonisation. If you use any commodity as money, it is resource based economies like Africa that benefit. If you use paper based manipulative currency, the technology based economies like West Benefit.


This warped decision on floating is my only reason to believe that Tinubu was never an accountant.

Floating the currency was a good idea if Buhari and his cabals didn't already sell off huge amount of crude oil for looting like Reno Omokri stated. There's little money in the country as we speak thus the floating of currency.

The floating idea is to ensure the more export goods are sold in dollars, it means more naira in the country thus getting a lot of things done. However the problem is Nigeria is more of an importer than an exporter which needs to change. It will also be an avenue to checkmate importers thus making a lot of people think home to export more since they will get more money for their exported products. however the problem is some people in the country are quite corrupt themselves and would even want to use it as an avenue to cause inflation in the country. Besides, the lack of refineries too. Several thought the rehabilitation of Portharcourt refinery was already completed, added with Dangote's refinery but what Tinubu didn't know was none of it was completed, even though Buhari commissioned it.

Point was if there was functional refineries to ensure fuel and even food were cheap in the country, no one would care about dollar rate in the country while more people & industries would spring up and embark on more agriculture for exports, as well as create things to export out while bringing in more money until the dollar to naira eventually fall and stabilize. At that point of stability, there would have been a lot of industrial spring up and agricultural revolution.

1 Like

Re: Naija: Instead Of Dollars We Can Use Gold as FX by optimusprime2(m): 12:12pm On Oct 23, 2023
We could use cows... afterall Buhari has a cattle Ranch.

1 Like

Re: Naija: Instead Of Dollars We Can Use Gold as FX by GerogeI(m): 6:39pm On Oct 23, 2023
Dsimmer:


Floating the currency was a good idea if Buhari and his cabals didn't already sell off huge amount of crude oil for looting like Reno Omokri stated. There's little money in the country as we speak thus the floating of currency.

The floating idea is to ensure the more export goods are sold in dollars, it means more naira in the country thus getting a lot of things done. However the problem is Nigeria is more of an importer than an exporter which needs to change. It will also be an avenue to checkmate importers thus making a lot of people think home to export more since they will get more money for their exported products. however the problem is some people in the country are quite corrupt themselves and would even want to use it as an avenue to cause inflation in the country. Besides, the lack of refineries too. Several thought the rehabilitation of Portharcourt refinery was already completed, added with Dangote's refinery but what Tinubu didn't know was none of it was completed, even though Buhari commissioned it.

Point was if there was functional refineries to ensure fuel and even food were cheap in the country, no one would care about dollar rate in the country while more people & industries would spring up and embark on more agriculture for exports, as well as create things to export out while bringing in more money until the dollar to naira eventually fall and stabilize. At that point of stability, there would have been a lot of industrial spring up and agricultural revolution.

Floating of currency means creating a free market to determine the exchange rate. It has no import or xport advanage. Import and export advantage lies in the over valuation (eg. Pound) or undervaluation ( eg. Yuan) of the currency, not the mechanism of price determination whether float of fixed.

Further, Naira as it currently is, is not floating, rather it is under graduated free fall. Because a free market must always balance demand and supply. Its a bit tricky to understand this balance when it comes to currency pairs. Each currency must be freely demanded and freely supplied to the market. CBN has created what it considers a free demand and free supply for foreign currencies, without creating a free demand and free supply for Naira. Fireigners are importing from Nigeria without ouching Naira. This is why the exchange negotiations is against naira. It is not floating, rather it is in free fall.

Read and understand what I have said before talking about whether floating a currency is a good idea. Countries with limited economic leverages do not load their currencies. United Kingdom does not. USA is essentially using military might to force everyone to use dollar. They do not need any float. They can print as much dollar as they want without consequences. Chinese Yuan is devalued because China is a manufacture and wants to dump goods to kill other peoples local industries. So why is Naira to be floated? We are not manufacturers, we are consumers just like UK.

2 Likes

Re: Naija: Instead Of Dollars We Can Use Gold as FX by Dsimmer: 7:17pm On Oct 23, 2023
GerogeI:


Floating of currency means creating a free market to determine the exchange rate. It has no import or xport advanage. Import and export advantage lies in the over valuation (eg. Pound) or undervaluation ( eg. Yuan) of the currency, not the mechanism of price determination whether float of fixed.

Further, Naira as it currently is, is not floating, rather it is under graduated free fall. Because a free market must always balance demand and supply. Its a bit tricky to understand this balance when it comes to currency pairs. Each currency must be freely demanded and freely supplied to the market. CBN has created what it considers a free demand and free supply for foreign currencies, without creating a free demand and free supply for Naira. Fireigners are importing from Nigeria without ouching Naira. This is why the exchange negotiations is against naira. It is not floating, rather it is in free fall.

Read and understand what I have said before talking about whether floating a currency is a good idea. Countries with limited economic leverages do not load their currencies. United Kingdom does not. USA is essentially using military might to force everyone to use dollar. They do not need any float. They can print as much dollar as they want without consequences. Chinese Yuan is devalued because China is a manufacture and wants to dump goods to kill other peoples local industries. So why is Naira to be floated? We are not manufacturers, we are consumers just like UK.

I thought I mentioned the benefits of floating the naira. I actually cupped it from the Asians. It was at the time when their currency was weak they embarked on industrial growth and advancement. That is, their people started thinking home thus started producing things both for themselves and to export out at the dollar price thereby bringing in more revenue inflow which eventually stabilized their currency but at that time of stability, they already achieved their sustainability.

But the problem with Nigerians is most are corrupt & wicked thus will want to fleece others in the country, not helped by the lack of refineries to ease the cost of fuel which would have also facilitated other factors.
Re: Naija: Instead Of Dollars We Can Use Gold as FX by LikeAking: 11:32pm On Oct 23, 2023
Let’s learn economics from the Arabs not US..
Re: Naija: Instead Of Dollars We Can Use Gold as FX by plumcomm: 12:28am On Oct 24, 2023
GerogeI:


First our GDP is not insignificant, so we do not have forex issue cause if IOCs remittances, but because of a dumb Government, they have no idea of what a free market is. They floated the Naira against foreign currencies which is creating foreign currency demand, without floating foreign currencies against Nairà to create Naira demand in order to arrive at equilibrium pricing.

That's what you are calling IOC remittances. Basically, for you to float your currency, your exports should be in your currency. So foreign importers will approach your banks to get your currency in order to buy your items. They will have to haggle with your bank for an exchange. Basically your banks will be negotiating for more dollars for less Naira in order to make profit. That drives exchange rate in favour of Naira.

But now, we only have local importers going to ask banks for foreign currency, banks and bdcs must make money hence they will negotiate for more Naira for less currency. That drives the exchange rate against the Naira in a bottomless spiral without counter balance.

If you do not have demand for raw local currency, and demand for raw foreign currency in the market, float one of them is a stupid idea, cause there is no counter balance. It is not a free market. In the Current case, the exchange rate will not favour Naira even at 10,000 Naira to 1 usd it will still be sliding down against USD. The fall is bottomless, that why it's stupid plain and simple.



Why do we not have foreign demand for Naira, the Federal Government and politicians want easy access to USD. It makes money laundering easy. If you visit any ministry in Nigeria. Listen to the directors, they do not talk in Naira anymore. They are all dollarized. So just like Russia started selling oil in Rubbles, Nigeria must first sell oil and all other exports in Naira before floating the Naira. That's why past Govt. Maintained fixed exchange cause they want CBN to collect dollars for them. This one still wants CBN to collect USD, but wants to play with the idea of floating Naira to please western interest in devaluing African currencies to get cheap raw materials. Basically it was to buy for the controversial govt. Legitimacy in the eyes of the West.


Only countries with huge manufacturing like China, or Germany can benefit from currency devaluation. Like
you said, Raw materials exporters like us are better of with commodity based currency like gold, which the West have carefully killed since colonisation. If you use any commodity as money, it is resource based economies like Africa that benefit. If you use paper based manipulative currency, the technology based economies like West Benefit.


This warped decision on floating is my only reason to believe that Tinubu was never an accountant.
dollar will continue to go up until it pushes naira to the wall,thats a layman's illustration of floating.
Re: Naija: Instead Of Dollars We Can Use Gold as FX by Pythagoras001: 12:41am On Oct 24, 2023
Pretty simple speculative attacks on the naira. The Reserves have been badly depleted borrowing money that was stolen and did not improve per capita. There is limited demand for naira and no war chest (reserve) to defend the naira. it would be on a free fall till it reaches it true equilibrium value. And then we end up in a currency crisis. Instead of cutting the size of government and wasteful expenses they want to borrow money to buy foreign cars.
Re: Naija: Instead Of Dollars We Can Use Gold as FX by oyatz(m): 12:49am On Oct 24, 2023
GerogeI:


First our GDP is not insignificant, so we do not have forex issue cause if IOCs remittances, but because of a dumb Government, they have no idea of what a free market is. They floated the Naira against foreign currencies which is creating foreign currency demand, without floating foreign currencies against Nairà to create Naira demand in order to arrive at equilibrium pricing.

That's what you are calling IOC remittances. Basically, for you to float your currency, your exports should be in your currency. So foreign importers will approach your banks to get your currency in order to buy your items. They will have to haggle with your bank for an exchange. Basically your banks will be negotiating for more dollars for less Naira in order to make profit. That drives exchange rate in favour of Naira.

But now, we only have local importers going to ask banks for foreign currency, banks and bdcs must make money hence they will negotiate for more Naira for less currency. That drives the exchange rate against the Naira in a bottomless spiral without counter balance.

If you do not have demand for raw local currency, and demand for raw foreign currency in the market, float one of them is a stupid idea, cause there is no counter balance. It is not a free market. In the Current case, the exchange rate will not favour Naira even at 10,000 Naira to 1 usd it will still be sliding down against USD. The fall is bottomless, that why it's stupid plain and simple.



Why do we not have foreign demand for Naira, the Federal Government and politicians want easy access to USD. It makes money laundering easy. If you visit any ministry in Nigeria. Listen to the directors, they do not talk in Naira anymore. They are all dollarized. So just like Russia started selling oil in Rubbles, Nigeria must first sell oil and all other exports in Naira before floating the Naira. That's why past Govt. Maintained fixed exchange cause they want CBN to collect dollars for them. This one still wants CBN to collect USD, but wants to play with the idea of floating Naira to please western interest in devaluing African currencies to get cheap raw materials. Basically it was to buy for the controversial govt. Legitimacy in the eyes of the West.


Only countries with huge manufacturing like China, or Germany can benefit from currency devaluation. Like
you said, Raw materials exporters like us are better of with commodity based currency like gold, which the West have carefully killed since colonisation. If you use any commodity as money, it is resource based economies like Africa that benefit. If you use paper based manipulative currency, the technology based economies like West Benefit.


This warped decision on floating is my only reason to believe that Tinubu was never an accountant.


Since 1973, the CBN had be artificially pegging the exchange rates , depending on the Foreign Reserves they could afford to defend the rates, mostly to selected few, who would get the exchange rates at official subsidized rates and sold the Forex in black markets.

After almost 50 years of this subsidized exchange rates, the CBN was borrowing Billions of dollars to defend the artificially pegged exchange rates, should the CBN continue to borrow Billions of dollars to 'create cheap dollars' for Nigerians ,so that we can continue to import I-phones, Human Hairs, Expensive Wines, Thai Rice etc?
Re: Naija: Instead Of Dollars We Can Use Gold as FX by Floky215: 12:49am On Oct 24, 2023
Neckpresser101:

Nigeria has gold especially in the north and some parts of the west


Are you talking about the gold Zamfara people said belongs to them?

That gold belong to the Northern people and not Nigeria, mind you, so if you are thinking of that gold better take your mind off cos you ain't getting an ounce of that gold...!!
Re: Naija: Instead Of Dollars We Can Use Gold as FX by Neckpresser101: 2:05am On Oct 24, 2023
Floky215:



Are you talking about the gold Zamfara people said belongs to them?

That gold belong to the Northern people and not Nigeria, mind you, so if you are thinking of that gold better take your mind off cos you ain't getting an ounce of that gold...!!
But our Anambra oil is for everyone abi
Re: Naija: Instead Of Dollars We Can Use Gold as FX by LikeAking: 5:31pm On Oct 25, 2023
oyatz:



Since 1973, the CBN had be artificially pegging the exchange rates , depending on the Foreign Reserves they could afford to defend the rates, mostly to selected few, who would get the exchange rates at official subsidized rates and sold the Forex in black markets.

After almost 50 years of this subsidized exchange rates, the CBN was borrowing Billions of dollars to defend the artificially pegged exchange rates, should the CBN continue to borrow Billions of dollars to 'create cheap dollars' for Nigerians ,so that we can continue to import I-phones, Human Hairs, Expensive Wines, Thai Rice etc?

Naira traded at 1 Naira to $1, when Nigeria was literally manufacturing nothing..

This import narrative is just lies and decit..
Re: Naija: Instead Of Dollars We Can Use Gold as FX by LikeAking: 4:09pm On Oct 26, 2023
Renewed Shege Pro Max!
Re: Naija: Instead Of Dollars We Can Use Gold as FX by LikeAking: 4:10pm On Oct 26, 2023
Renewed Shege Pro Max!
Re: Naija: Instead Of Dollars We Can Use Gold as FX by oyatz(m): 4:39am On Oct 31, 2023
LikeAking:


Naira traded at 1 Naira to $1, when Nigeria was literally manufacturing nothing..

This import narrative is just lies and decit..


Many of you probably think Governments just print money.

In reality, paper currencies are like RECEIPTS of certain goods (initially, gold and other precious metals, then later volume of Foreign Reserves).

Historically, what we call paper currencies were receipts ,issued by Goldsmiths to people who deposited their golds in the strongrooms (which were secured by hefty armed men) of these Goldsmiths.

With time, people started using these receipts , rather than the actual golds to trade, such that the receipts became the precursors of paper currencies and the strong-rooms of the Royal Gold reserve became the Central Banks.

You don't understand the concept.

At inception in 1973, currencies we're backed by 'Gold standards' .

The USA dropped the Gold standards in 1973 and the UK did similar thing around 1979.

Try to read about these before commenting on issues you clearly don't understand.

1 Like

Re: Naija: Instead Of Dollars We Can Use Gold as FX by Iamanoited: 6:04am On Oct 31, 2023
THE ABUSERS OF THE SYSTEM ARE ALWAYS IN THE SYSTEM AND THERE'S NO INTERNAL CONTROL MECHANISM TO STOP THEM.
Re: Naija: Instead Of Dollars We Can Use Gold as FX by Iamanoited: 6:06am On Oct 31, 2023
THE ABUSERS OF THE SYSTEM ARE ALWAYS IN THE SYSTEM AND THERE'S NO INTERNAL CONTROL MECHANISM TO STOP THEM.


THE NIGERIAN CBN IS FAST BECOMING A "THUG REGIME".
Re: Naija: Instead Of Dollars We Can Use Gold as FX by LikeAking: 6:20pm On Oct 31, 2023
oyatz:


Many of you probably think Governments just print money.

In reality, paper currencies are like RECEIPTS of certain goods (initially, gold and other precious metals, then later volume of Foreign Reserves).

Historically, what we call paper currencies were receipts ,issued by Goldsmiths to people who deposited their golds in the strongrooms (which were secured by hefty armed men) of these Goldsmiths.

With time, people started using these receipts , rather than the actual golds to trade, such that the receipts became the precursors of paper currencies and the strong-rooms of the Royal Gold reserve became the Central Banks.

You don't understand the concept.

At inception in 1973, currencies we're backed by 'Gold standards' .

The USA dropped the Gold standards in 1973 and the UK did similar thing around 1979.

Try to read about these before commenting on issues you clearly don't understand.

We are too different people..

You confirm to standards and I don’t..

If you want good economical advice then go to China not the USA..

Using gold will reduce the pressure on the dollar… Foreign companies can remit their funds via gold.. This has many advantages..

U are a member of the USA is 100% perfect gang..

We can’t continue to imitate the USA, it has never paid off…

Gold will work..

It works in the Arab world..

Don’t be quick to use the USA as an example when it come to monetary polices..
Re: Naija: Instead Of Dollars We Can Use Gold as FX by aQUINandmore: 6:46pm On Oct 31, 2023
GerogeI:


Floating of currency means creating a free market to determine the exchange rate. It has no import or xport advanage. Import and export advantage lies in the over valuation (eg. Pound) or undervaluation ( eg. Yuan) of the currency, not the mechanism of price determination whether float of fixed.

Further, Naira as it currently is, is not floating, rather it is under graduated free fall. Because a free market must always balance demand and supply. Its a bit tricky to understand this balance when it comes to currency pairs. Each currency must be freely demanded and freely supplied to the market. CBN has created what it considers a free demand and free supply for foreign currencies, without creating a free demand and free supply for Naira. Fireigners are importing from Nigeria without ouching Naira. This is why the exchange negotiations is against naira. It is not floating, rather it is in free fall.

Read and understand what I have said before talking about whether floating a currency is a good idea. Countries with limited economic leverages do not load their currencies. United Kingdom does not. USA is essentially using military might to force everyone to use dollar. They do not need any float. They can print as much dollar as they want without consequences. Chinese Yuan is devalued because China is a manufacture and wants to dump goods to kill other peoples local industries. So why is Naira to be floated? We are not manufacturers, we are consumers just like UK.
While your write-up raises valid concerns and perspectives regarding the floating of the Nigeria currency, there are some points that can be disputed or further analyzed:

1. *Import and Export Advantage: your write-up suggests that the advantage in import and export lies in the overvaluation or undervaluation of a currency rather than the mechanism of price determination (floating or fixed). While exchange rates do play a significant role, it's essential to acknowledge that a floating exchange rate system can influence a country's trade balance. A weaker currency can make exports cheaper and imports more expensive, potentially improving trade competitiveness.

2. *Naira's Floating Status: The argument that the Naira is not floating but in a free fall due to a lack of balance between demand and supply is a legitimate concern. However, it's important to note that currency exchange rates can be influenced by various factors, including economic conditions, foreign investment, and government policies. A true floating exchange rate system should allow market forces to determine the exchange rate without significant intervention.

3. *Foreign Exchange Market: you raised the issue of foreign importers not needing to touch Naira. This is a complex issue as it involves the accessibility and convertibility of the currency. A floating exchange rate system typically allows for the exchange of currencies based on market forces, but the issue of accessibility to Naira for foreign importers depends on the policies and regulations set by the central bank and government.

4. *Comparison with Other Countries: The argument suggests that Nigeria should not float the Naira because countries like the UK and the USA do not float their currencies. While it's true that not all countries have fully floating exchange rates, it's important to consider the unique economic conditions and goals of each country. The UK, USA, and China have different economic structures, trade priorities, and international roles compared to Nigeria. Floating the currency might be more suitable for some countries and less so for others.

5. *Economic Leverage and Currency Valuation: The assertion that countries with limited economic leverage do not need to float their currencies is a broad generalization. Economic policies and currency exchange rate mechanisms should be tailored to a country's specific economic circumstances and goals. Floating a currency can offer benefits such as flexibility and the ability to respond to changing economic conditions.

Though your opinion raises valid concerns and offers a perspective on currency floating, but it's important to consider that the decision to float or fix a currency is not one-size-fits-all. Each country's unique economic circumstances, goals, and external pressures should be carefully evaluated when determining the most appropriate exchange rate mechanism. Additionally, the impact of currency exchange rate policies on trade, foreign investment, and domestic economic stability should be part of the discussion.
Re: Naija: Instead Of Dollars We Can Use Gold as FX by GerogeI(m): 2:38am On Nov 24, 2023
Dsimmer:


I thought I mentioned the benefits of floating the naira. I actually cupped it from the Asians. It was at the time when their currency was weak they embarked on industrial growth and advancement. That is, their people started thinking home thus started producing things both for themselves and to export out at the dollar price thereby bringing in more revenue inflow which eventually stabilized their currency but at that time of stability, they already achieved their sustainability.

But the problem with Nigerians is most are corrupt & wicked thus will want to fleece others in the country, not helped by the lack of refineries to ease the cost of fuel which would have also facilitated other factors.

Asians are mostly manufacturers, they have perfected the art of undervaluing their currencies to gain advantage in export if finished goods. This also ensures they can dump into any third developing country. This question is not just about corruption, but poor strategy and policies. Why are bankers manning the CBN? They are merely experts in counting money, not economics?
Re: Naija: Instead Of Dollars We Can Use Gold as FX by GerogeI(m): 3:28am On Nov 24, 2023
oyatz:



Since 1973, the CBN had be artificially pegging the exchange rates , depending on the Foreign Reserves they could afford to defend the rates, mostly to selected few, who would get the exchange rates at official subsidized rates and sold the Forex in black markets.

After almost 50 years of this subsidized exchange rates, the CBN was borrowing Billions of dollars to defend the artificially pegged exchange rates, should the CBN continue to borrow Billions of dollars to 'create cheap dollars' for Nigerians ,so that we can continue to import I-phones, Human Hairs, Expensive Wines, Thai Rice etc?

The corruption in CBN has no direct link the exchange rate. There are many other ways to allow banks handle forex flows independently not CBN.

Defending naira means using your export earnings to pay your import demand. This is not the problem, every country is doing this one way or another.

The problem lies in overcentralization of forex controls where all dollars goes to CBN, and is made available for politicians, who prioritize their access to local value. The consequences is that they artificially devalue the local currency every time their is a pressure of higher import than export.

A simple way to understand this is to compare Nigeria Import /Export Ratio in USD. This Ratio in ideal situation should be the exchange rate of naira to USD.
For 2022, Nigeria imported 56.3 billion USD worth of goods. And exported 46.9 billion USD worth of goods.

Our import exceeds our export by 10.6 billion USD., And the Ratio is is 56.3/46.9=1.2. The USD should be worth 1.2 Naira. Let's consider all the imperfections in the system and make this 10 times worse than ideal. 1 USD should be worth 1.2x10=12 naira.

Let's do a similar Analysis for a comparable African country, Egypt. In 2022 Egypt imported 85.76 billion usd in goods, and exported 51.6 billion USD. Egypt Import Export Ratio for 2022 is 85.76/51.6=1.66
Multiply by 10 to consider real world imperfections, Egyptian pounds should exchange at 16.6 To USD. In reality Egyptian pounds traded at 15 to 1 USD in Jan 2022, and 24 to 1 USD in Dec 2022.

Let's look at South Africa.

Imports 2022 was 136.2 billion usd
Exports 2022 was 122.9 billion usd

Import Export Ratio =136.2/122.9=1.10
Multiply by 10, 1 usd should ideally be 11 rands.
In reality in 2022, 1 usd was 16.88 rands.


These comparisons shows you how well the economy is being managed. For Nigeria instead of 1USD to 12 naira in 2022, we had 740 naira.
Our economy and currency is simply being mismanaged for politics and theft, and its been going on for decades. Currency devaluation not only enables politicians to steal, they use it to please the West. It should banned by law.

When was the last time naira exchanged at 12 naira to 1 USD? How much has the Naira been devalued? As at 2022, it was 740/12×100=6166% devalued.
This is the only reason coins have no value any more.

Someone will come to argue we should use forex earning not import and export. They mirror , so it's same thing. Or they can argue that our population is large. It reflects in the size of our imports, vs local production. The summary is that Nigeria earned only 20% less foreign exchange than it needed for purchases in 2022. How that warrants today's exchange rate of N1150 to usd is a mystery. But that forex is scarce I'd a big fat lie we have at least 80% of what we need.

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