naijapips04:


So what was Peter Obis suggestion?

Sucre6:
As an economist let me make this as clear as possible in lay man terms

Printing more money will lead to what is called money illusion when huge amount of money is chasing little amount of goods/services.

Printing more money will make the money valueless, which will plunge the country into deep stagflation, which is high unemployment and inflation join together.

Countries that their money has money value than ours would not invest in the economy.

Prices of things will skyrocket like mad, imagine having ten million naira and a price of big loaf of bread is one million naira, u end up spending ten million naira just to feed for 3 days.

With the ridiculous way the value of the money would be the country can't even import anything which will lead to more poverty, even the so call rich men and women would eventually run out of money to spend.

It's a scary situation, during covid 19, tinubu suggested that government should just print more money, I read the news and laughed at his nonchalant statement, which clearly shows that he understands nothing in money generation or managing the resources of the nation, reason why I will vote for Peter obi, not out of sentiment but out of the fact that he understands the uniqueness of Nigeria situation and knows how to economically tackle it.

Corea4king:


So,how how did borrowing solve the situation

Sucre6:


You see, it's a vicious cycle, take for example, when more people are employed, they will be paid right, what is the value of working when u know that the money you will be paid won't be enough to buy you food to eat not to talk of clothing and luxury, it gets to a point when the money becomes so valueless that there will be no need to work, a case study is Zimbabwe.

When there is stagflation, prices can't be controlled because an individual could monopolies the market take for example, when dangote refinery is ready, he would be a sole producer of oil in Nigeria, when when stagflation sets in, you can't control or regulate how he sales his product because the whole country is dependent on him for survival, it's will be wild like going back to stone ages.
Now this is a practical example

Take for instance if our normal exchange rate is maybe #1,000 to 1$ dollar and a crude of oil is sold at #100,000 these foreign countries would have to exchange $10 dollars just to acquire one barrel of oil, but when stagflation sets in, exchange rate would be crazy, say N100,000 for $1 dollar and a barrel of oil is sold at 100,000 to foreign export for example, when stagflation sets in and the naira looses it value, you could buy 10 barrels of oil for $1 dollar

These illustration above means, the value of money that the foreign countries pays for 1 barrel of oil when the economy was good, same amount of money would buy 10 barrels of oil when the economy becomes bad thereby plunging the economy into deeper hyper inflation, most countries wont even buy from Nigeria then, to avoid importing inflation to their country, yes a country could be plunge into inflation by importation from inflation Country.


The solution to solving these, The CBN introduces monetary and fiscal policy

Which include Open Market operation, sales of bonds and securities and so on, they do this to rake in excess money in circulation, and when this is continued the money in the economy would be just fine to run the economy. The extreme measures is devaluation of the face value of the currency,

So that's it, hope it's clearer now?

PNomsule:


My problem is those responding and claiming financial experts are simply regurgitating textbook inflation analysis which I already envisaged in my post.

PNomsule:


It appears the responders I'm getting on this issue are plain textbook analysis and not even addressing the issues from the points I posited, especially that the fears you raised, my post envisaged it already?

Can prices be controlled, if not what then is the usefulness of the Pricing Regulatory & Control bodies we have in the country?

What happens to the urgency of Capitalists to get more people employed as to meet rising demands associated naturally from too much money chasing fewer goods?

alphaNomega:
You are still giving another textbook analysis.

Let's say the price regulatory agencies maintain the cost of goods and services despite giving every Nigerian N5m naira. That's one of the points OP pointed out

Timekeeper452:
Lol. Let me explain it this way. Money is just a piece of paper, it is literally just a piece of paper. What makes money important is actually what that money can buy itself and not the money at hand. Now imagine if a bag of beans is Valued at 50,000 naira. And you just keep on printing money and handing it over to everyone, what happens when the money in circulation outweighs the beans in circulation? It just becomes useless or the price of that beans will skyrocket up and your money looses its value. If you keep printing more, the beans will either eventually run out or the price of that beans will sky rocket till your money becomes useless in value. So the solution isn’t printing more money because it will just mean something everyone can have, and if everyone can have that, then consumption will outweigh production, and something must fund that production. That being said, don’t be fooled, governments print money steady, that’s how they steal and embezzle and become rich. If you just don’t print, the population of those in existence will outweigh the money in circulation and your country will just collapse. What Nigeria is facing is that we don’t fund the right things in this country to generate production, we rely so much on importation and we have corrupt leaders stealing these money meant to be in circulation.

alphaNomega:


Textbook people...think outside the box.

Now in this your example, what happens when the price of beans does not change no matter how much money is pumped in?

PNomsule:
I am really just curious as to "why can't we just print more money and solve the poverty problem in the country?"

Terms like "inflation" and the "devaluing of the naira" are the usual buzz answers to that question. Also, people give the example that if we were to print more money and just give everyone N5,000,000 for example, then everyone would go out and buy things, thus making "THINGS" more scarce and in short supply and hence driving up the prices of things (simple demand/supply economics). But herein lies the catch for me... With TRUE unemployment rate somewhere around 33% in the country, if DEMAND for "THINGS" rose, then I would think that companies would WANT to hire more people and build more processing plants to keep up with demand and raise their profits. So, the influx of cash (printed money) would seem to solve the unemployment problem.

Again, we have agencies that regulates pricing in the economy: PPPRA, Price Control Board (Ministry of Commerce) etc, with those, can't the likely over pricing of commodities (THINGS) be controlled and gazetted to avoid the story of "too much money chasing fewer goods"?

In the final analysis, a robust and health competitive economy would have been created and underemployment issues largely solved.

Economists and Analysts lets discuss?

alphaNomega:
You are still giving another textbook analysis.

Let's say the price regulatory agencies maintain the cost of goods and services despite giving every Nigerian N5m naira. That's one of the points OP pointed out

alphaNomega:


Textbook people...think outside the box.

Now in this your example, what happens when the price of beans does not change no matter how much money is pumped in?

RZArecta:
you're not a financial analyst oga, stop lying and even if you insist you are then you're obviously very terrible at your job and I'll advise every sane person to run away from you

PNomsule:
I am really just curious as to "why can't we just print more money and solve the poverty problem in the country?"

Terms like "inflation" and the "devaluing of the naira" are the usual buzz answers to that question. Also, people give the example that if we were to print more money and just give everyone N5,000,000 for example, then everyone would go out and buy things, thus making "THINGS" more scarce and in short supply and hence driving up the prices of things (simple demand/supply economics). But herein lies the catch for me... With TRUE unemployment rate somewhere around 33% in the country, if DEMAND for "THINGS" rose, then I would think that companies would WANT to hire more people and build more processing plants to keep up with demand and raise their profits. So, the influx of cash (printed money) would seem to solve the unemployment problem.

Again, we have agencies that regulates pricing in the economy: PPPRA, Price Control Board (Ministry of Commerce) etc, with those, can't the likely over pricing of commodities (THINGS) be controlled and gazetted to avoid the story of "too much money chasing fewer goods"?

In the final analysis, a robust and health competitive economy would have been created and underemployment issues largely solved.

Economists and Analysts lets discuss?

naijapips04:

So what was Peter Obis suggestion?

Farid24224:
Doing that will break the economic balance...Not everyone should be rich, there have to be the poor as well for the rich to be recognized..

descarado:

Nobody is contributing to anything.
Anything happening to Nigerian economy is 100% caused by the hovernment of the day.

A consumer economy is a dead economy.
ECO 101 summation.
Business people flow with the tide.

LienwaltAbel:

What rubbish!

jumper524:
the dollar is the highest currency in circulation and its still valuable. There's cash shortage in Nigeria, go to market and see shops overstocked with little or no buyer, inflation can only happen if shops are not overstocked.

PNomsule:


It appears the responders I'm getting on this issue are plain textbook analysis and not even addressing the issues from the points I posited, especially that the fears you raised, my post envisaged it already?

Can prices be controlled, if not what then is the usefulness of the Pricing Regulatory & Control bodies we have in the country?

What happens to the urgency of Capitalists to get more people employed as to meet rising demands associated naturally from too much money chasing fewer goods?

PNomsule:


I fancy the points you noted however, from the post I made, how do you see the aspect of Price Control Mechanism as a critical vehicle to combat and stiffle inflation before it rears its ugly head, say on bread for example?

PNomsule:
I am really just curious as to "why can't we just print more money and solve the poverty problem in the country?"

Terms like "inflation" and the "devaluing of the naira" are the usual buzz answers to that question. Also, people give the example that if we were to print more money and just give everyone N5,000,000 for example, then everyone would go out and buy things, thus making "THINGS" more scarce and in short supply and hence driving up the prices of things (simple demand/supply economics). But herein lies the catch for me... With TRUE unemployment rate somewhere around 33% in the country, if DEMAND for "THINGS" rose, then I would think that companies would WANT to hire more people and build more processing plants to keep up with demand and raise their profits. So, the influx of cash (printed money) would seem to solve the unemployment problem.

Again, we have agencies that regulates pricing in the economy: PPPRA, Price Control Board (Ministry of Commerce) etc, with those, can't the likely over pricing of commodities (THINGS) be controlled and gazetted to avoid the story of "too much money chasing fewer goods"?

In the final analysis, a robust and health competitive economy would have been created and underemployment issues largely solved.

Economists and Analysts lets discuss?