skydiver01:
All valid points. That is what some investing is about - taking risks with the objective of making money. One concern I have is not bitc0in as an asset class but the vulnerability of bitc0in/crypt0 wallets to theft. Plus I still suspect most global central banks will not allow any crypt0 asset to be used as an alternative to their currencies as a means of payment. As such, I expect crypt0s will fade out in the coming years following more regulation. Right now and up till now its been a cowboys markets. India & China have banned crypt0s and I expect more large countries will follow. Nevertheless, I wish all investors great fortunes from whichever assets they to invest in.

Olaide1295:
I have learnt a lot from this forum over the past years.

.....

ojesymsym:
Using your graph, its seems it has a 4 year cycle. If that pattern is correct then there should be a pull back or loss in value this year. Right?

jedisco:


Its been discussed at length before. Repaying domestic debts would not be an issue and foreign debts are still within sensible limits. OTOH, that over three-quarter of revenue generated is used in servicing debt is a comcern.

To put things in perspective, money supply (i.e new money) increased by over 13% last year. While this was not uncommon around the globe, what's rather unique is that our government has also shown that a significant proportion of this new money will be used to continue borrowing at high rates.

From economics, we know that in a population, the first recipients of new money benefit the most as they get and utilise their share before the resulting inflation eliminates the buying power of those down the line. So for an individual, the bond offering presents a safe and sensible investment. For the nation, whether that's the best way to spend is anyones guess

Olaide1295:


Boss, why would repaying domestic debt not be an issue? Because the CBN can print new money to meet the obligations?

Seems to me like there is no easy way out. Any solutions?

1. The GDP growth has averaged about 4%
2. The annual population growth is 2.5% which eats up most of the GDP growth. Hence the effective growth is just over 1%

3. Over the last year, money supply increased by 13.8%. This is effectively new money pushed into the system.
4. Our revenue and effective GDP growth are less than 2%. This means that this new money is not backed by economic activity or demand.
5. Law of economics states that supply outstripping demand = inflation. Also in this case devaluation.

6. The nation last year spent about 76% of income servicing debts
7. Despite spending most of revenue servicing debts, the government has continued to borrow locally at exorbitant rates of about 13%.
8. As projected economic growth and revenue cannot keep up with the borrowing rates, the only way the government can keep up is by printing new money.

9. New money being streamlined into non-productive sectors will only make infllation worse

10. Lastly, excessive new money being printed takes us back to stage 3

jedisco:


Hehe.... You answered the question... What's more detrimental is that the new money is not being tied to capital expenditure or productivity rather, it's spent to keep borrowing rates high.

Of course, buying government debt of a weak currency can many times be detrimental unless macroeconomic measures have been put in place to reverse inflation. Foreign portfolio investors who rushed to buy CBNs TBs in 2014- 2016 cos of the 'juicy rates' we're burnt badly. Most were practically begging to leave with about half of their initial investment.

Regarding solutions, a number of things can be done
1. Government waste needs to be cut down significantly, this will allow the masses accept tightening measures down the line
2. Petrol subsidy removal/Dangote refinery- self explanatory
3. Borrowing rates should be cut down to help stem inflation. Bond rates shouldn't chase inflation.
4. New money should be tied to production
5. The tax base could still be improved in sensible ways....

Rizin:
I like your explanations. It's well detailed and nice too. But you are giving remadies to the wrong people. The people that can implement them are not on nairaland.

jedisco:


First, if your concern is about theft, there are hardware wallets that are very safe. You can withdraw your bitc0in into them and only transfer out when you want to sell.

If bitc0in was going to fade out, it'd have done that in 2017 and not now. The understandable knee-jerk reaction for some central banks like ours have been to ban crypt0 and when they see how ineffective that is, they turn around and regulate. This is the case with India who have now legalised crypt0. Western nations have made it clear that they're interested in regulating the space. That has been a big win for crypt0 as due to the regulatory clarity, institutions have poured in billions into bitc0in.

You might not have been following the news, but adoption of crypt0 and blockchain over the past year has been staggering. Many US banks now offer crypt0 services to clients, Facebook (now Meta) is betting its future on blockchain and is testing a payment remittance service powered by crypt0. Twitter, PayPal, Visa, Mastercard e.t.c have all ventured massively into the space. A number of companies, investment funds and councils/local areas now own bitc0in as part of their balance sheet. The U.S. has been clear that they have no interest in banning bitc0in and even want to make some transactions tax free. The UK has been keen on generating revenue from the industry. Spanish banks have petitioned their central bank to provide clarity and allow them offer crypt0 services. There are loads more that I can’t even remember

skydiver01:
Crypto Fans, Portugal is calling Zero% tax plus payment acceptance.

The ‘Bitcoin Family’ immigrates to Portugal for its 0% tax on cryptocurrencies

https://www.cnbc.com/2022/02/06/bitcoin-family-moves-to-portugal-crypto-tax-haven.html

janga:
Gtco plc buy back investment
-one fund management limited

emmasoft:


A good development.

ojesymsym:
Very unusual for oga Emmawumi to be absent for such long spells, hope all is okay?

richforever123:
Please I have a very important question, Why is it that when oil is at $30 there will be pandemonium everywhere in Nigeria, Government will devalue the Naira and the cost of food items will go high?

But now that oil is at $90 an all-time high things will not stabilize, there is even a risk of fuel scarcity now, which further increase the cost of survival in Nigeria?

Isn't there a situation we can take advantage of?

donguutti:


Due to our National dependence on Oil for Govt Revenue and the dependence on Petrol for transport and power for individuals and businesses ,we are stuck between a rock and a Hard place.

If Oil falls to $30 dollars per barrel...govt at all levels go broke,unable to pay salaries or fund expenditure...also at that level, dollar supply dries up , devaluation and inflation become a problem

At High oil prices...Subsidy spending goes high, deductions for subsidy claim a large chunk of revenue,creating difficulty in funding payments and importing fuel,hence scarcity,

now if subsidy is removed...Govt gains and the masses lose in the short term ..with inflation reducing purchasing power...

So at one extreme Both Government and the People lose,while at the other end Government gains,the people lose.

The only sweet spot is between 58-65 dollars where subsidy payment is manageable and government revenue is not too low

AngelicBeing:

During the reign of ex Libyan strong-man Gaddafi, he used Oil in Libya to transform Libya to a mini - Europe.

Libya although an African country was envied by the Western world because of the way Gaddafi was able to use the same oil that has become a curse to Nigeria to make Libya a great nation.

Gadafi used oil and gas to ensure that Libyan citizens enjoyed the basic necessities of life >> food, shelter, security etc.

aieromon:


Libya population - 7 million
Nigeria population - 200+ million

AngelicBeing:
It makes no difference, even if Libya was 1Trillion people, Gadafi would have still been able to do the same thing, it is not about population but a combination of several factors which includes but not limited to ENDEMIC CORRUPTION in the oil and gas industry in Nigeria, you can pocket subsidy and cook up account in Nigeria to steal / embezzle money but try that in Libya or other GCC COUNTRIES, na AK47 to the skull of the culprit at the back of the desert,

AngelicBeing:
It makes no difference, even if Libya was 1Trillion people, Gadafi would have still been able to do the same thing, it is not about population but a combination of several factors which includes but not limited to ENDEMIC CORRUPTION in the oil and gas industry in Nigeria, you can pocket subsidy and cook up account in Nigeria to steal / embezzle money but try that in Libya or other GCC COUNTRIES, na AK47 to the skull of the culprit at the back of the desert,

Labadi69:


I am an idiot, I am one of the most useless poster on nairaland.com, demented scallywag belch by a village witch, because of how USELESS AND STUPID l am, the day l was born due to my non- functioning brain, l was named LABADI69 YAMAYAMA alias the Most useless idiot on Earth by my family.

l also have the brain Cell of A PIGLET, l am not fit or qualified to live among decent human beings and that is why I post rubbish on nairaland.com daily, scroll through my username name on nairaland.com and you will see all the Rubbish l post in every SECTION OF NAIRALAND.COM due to my DEAD BRAIN CELL.

l am frustrated in Ivory Coast where l currently reside and my second Name is Labadi69 Yamayama, the most useless idiot on nairaland.com, Nigeria, Africa and the whole world.

I will continue to be an idiot because I was belch by a village witch in a Yamayama ghetto and yamayama follows me about daily and I will live a Yamayama life for the rest of my life on planet earth (