₦airaland Forum

jeffoe:
interest rate increase, capital flow restrictions. Their central banker is one of the finest economist in the world

capital flow is restricted already. Bro an outside book method then genius then

Gbajure:
He is not only a good financial analyst, he is deeply thoughtful dude. Whereas you come out as poorly informed and badly educated.
1. Read up on quantitative easing.
2. Answer the questions he brilliantly put together.

LMAOOOO okay. Your country has been massively printing naira to shore up the economy at least since 2016/17. How far with your economy now ? Check out all the countries including first world countries who followed this path talk less of you who can't even manufacture a toothpick. Just prepare for the worst global financial meltdown in history within the next few months. My hand no dey there

Insightful opinion sir

djon78:
All the financial transactions in the world revolves around the US dollars.

Before the second world war gold was the the Central underlying hedge for every monetary value but after the war the US took control of everything global about money

That's why countries foreign reserves are in the dollars

Countries cannot print money not covered by their foreign reserve.
Inflation, drop in currency values will batter the country in questions

CBN already printed 20trillion and flooded the country. That's why inflation and rapid devaluation of Naira has occurred


What Nigeria needed was firstly improvement of critical infrastructures especially power, roads etc
Power alone will help Nigeria a lot to industrialize

Industrlization will help Nigeria move from import dependent country to at least produce what we use before exporting.

Ordinary crude oil we don't produce here. And many other critical issues

Changing Nigeriyas economic outlook is not a rocket science but we have had non truthful leaders that don't want change

They want status quo to remain the same, because change will render many of them useless.

That's why Nigeria's economic policy is still dated back to the 1980s.

Effective Leadership must be put in place because a point will come Nigeria will be irredeemable.

Other nations are rapidly progressing and advancing. While Nigeria is still stuck in retrogression

The only positives are only the hardworking attitude of ordinary citizens from music to nollywood to few serious organizations, including the youths

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?

We Ve answered this question here several times. The cost of production and the dollar factor

Somebody has not been reading his monetary and fiscal policies text book.

There are other instruments you can use to control money supply instead of printing.
Reduction of interest rates
Reduction of tax rates etc

If you really want to stimulate the economy what you actually need is to increase productivity, you should always look to expand your economy, import less and export more instead of printing more money. Its just like Somebody who needs a heart surgery using panadol.

Money will eventually become useless...in Germany during the depression, more money was printed. It came to point where wheelbarrows were used to carry money to buy little stuffs... armed men would attack the carrier, pour out the money and take away the wheelbarrow... because the wheelbarrow was more valuable than money...

Farid24224:
That's rubbish to you because you lack the capacity to think..

It's you who lacks the capacity to think. Look at the useless reason a full blown human being gave . Your mates are busy coming forth with reasonable replies, but you decided to go off point.

I think the main reason has to do with the fact that resources are more important than money. Increasing the amount of money in circulation will create an imbalance between resources and funds, and since the resources are more important their prices will increase. I'm not an economist oh, na just common Sense I dey try use.

jumper524:
Bros in a financial analyst and I've always maintained this perspective.
Many financial policy are not real, they are all artificial and several factors make them happen.
Printing more money knowingly leads to artificial inflation but secretly still maintains the economic situation.

Modified: a simple question to all those relegated minds calling me fools. Those who don't have the balls to question status quo.

1, Why do countries borrow when they have money in their external reserves.

2, if countries like USA, CHINA, UK e. t. c are the top debtors in the world, which countries come dey borrow them the money?

Ever asked yourself why can't cbn print more naira and sell our crude oil in Naira so Europeans can source for our local currency.

Only USA is benefiting from this, by printing. Only then can print usa as the world reserve currency. And, yes they can print to settle external issue. If they print to flow in their economy, there will be inflation, as there will be stagnant goods to satisfy desires. Except, they'll loan smes and commercial capitalists.

Nigeria can never try it too much. What do we even produce ?? It's stagnant inflation.

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?

the price of beans can never not change because production won’t be matching consumption since money is heavily in circulation and more is printed. The only way the price of beans can match same price of money is if you keep making that same beans the same way you are making that money. None shall out match the other.

Your country is either matching production to meet up with money in circulation or your currency looses value.

PNomsule:
Lolz my brother @ willy7 ...

Truth is, I don't even have a favourite amongst the 3 likely contenders, Amaechi would have been my preferred choice.

Amaechi that couldn't keep his house in order in Rivers APC abi which one?

highness25:
Amaechi that couldn't keep his house in order in Rivers APC abi which one?

No mind me brother, na selfish interest. You know the vibes

this is the bullshit they feed us with that they can't print more money, but in actual fact they do print more money by the orders from above ,if the man from above needs they money.

Let see it this way, if govt print more money it means the people will have more money chasing few goods this will lead to high price of goods. But if the producers wants to meet this high demand he has to increase factors of production which will lead to increase in cost of production and lead to high price of goods and service, because if the workers will want to demand for a big pay. there by the impact of printing more money in the economy will have no positive impact on the economy

jumper524:
Bros in a financial analyst and I've always maintained this perspective.
Many financial policy are not real, they are all artificial and several factors make them happen.
Printing more money knowingly leads to artificial inflation but secretly still maintains the economic situation.

Modified: a simple question to all those relegated minds calling me fools. Those who don't have the balls to question status quo.

1, Why do countries borrow when they have money in their external reserves.

2, if countries like USA, CHINA, UK e. t. c are the top debtors in the world, which countries come dey borrow them the money?

Ever asked yourself why can't cbn print more naira and sell our crude oil in Naira so Europeans can source for our local currency.

If you borrow more than you earn, with heavy servicing, you'll be financially insolvent.

Printing of more money is very bad. As strong as the us ecomony, they tried it at 2020 (covid 90 peroid) and they are facing the result today. Which is cost of living became very high (inflation). That many had start moving to neighbouring countries for survival (mexico/canada). And again, do you know the govertment spend money printing money. The govertment spend more printing n10, n20 and n50 (polymer) than n100, n200, n500 and n1000 (paper). They have stop printing n10, and n20, cos they cost alot and they no longer have value

Man enslaved himself the moment money was introduced and Handed the keys to few powerful MEN

I was good at economics in my secondary school days but I lost interest,when I discovered that what we were been taught is not realistically practicable

Again no man was supposed to be retched in 21st century,

The TERM POOR MEANS RETCHEDNESS IN AFRICA,THAT IS WHY THE DIFINITION OF POORVERTY ISN'T UNIVERSAL

a poor man in Africa will tell you that he is hungry why a poor man in the western world will tell you that he has burger but wants pizza

Mankind needs EMANCIPATION especially Africans

A while back, H.E. Obaseki (Gov. Edo State) revealed a "shocker" the CBN & the FGN are "legally" printing new bank notes into the financial system.

Do you know the consequences, inflation. That is why we are experiencing should high level of information.

No services, no earnings, just excess cash.

Printing more cash is just another way of "killing the economy"

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.

u come spoil ur d point ur are driving with obi inclusion, obi is also a daft man

Again a country doesn't have to print money to share

Print it secretly and invest it IN infrastructure, manufacturing hubs, factories,expand agriculture, get your citizens fully employed and tax them.

A GOVERNMENT SHOULD OPERATE LIKE A CIRCLE

CrownLands:
A while back, H.E. Obaseki (Gov. Edo State) revealed a "shocker" the CBN & the FGN are "legally" printing new bank notes into the financial system.

Do you know the consequences, inflation. That is why we are experiencing should high level of information.

No services, no earnings, just excess cash.


Printing more cash is just another way of "killing the economy"

Were is the excess cash then?

porthouse7:
u come spoil ur d point ur are driving with obi inclusion, obi is also a daft man

Everyone is entitle to his or her opinion

@ op please go and read about Venezuela, though they have one of the biggest oil reserves and are top oil producers, read what happened to their economy, too much naira in supply will result to prices of goods becoming inflated. Also let's consider USD as a "goods or a product" do you recalled that when dollar became too difficult to get due to CBN regulations and Nigeria's over-dependence on importation, i.e USD it became scarce, do you noticed that the price of dollar skyrocketed? This is because there's already too many naira in circulation that a wooing USD.
This was tinubu's recommendation during COVID-19 and people were hailing him as a great mind, I wish that people understands the state of the Nigerian economy.

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?

Demand increases but production capacity does not increases. Employing people does not mean production capacity increases as a result.

Spells:
This question has always troubled many.
Let me explain in a very simple way.

First things first. It is the Reserve Bank of Nigeria know as the country's central bank, that decides how much notes have to be printed. This decision is a part of CBN monetary policy - the policy that determines the amount of money in the economy.

Now, the very pertinent question - since the country is free to print any number of notes it wants, why doesn't it produce billions of Naira and distribute it among people and end all the poverty in one go?

Let us assume there are only 3 people in a country: Obina, Funke and Musa having a wealth of Naira. 300, 200 and 100 respectively. Also, there is just one commodity in the country that all three of them would buy using up all their wealth.
Therefore, total wealth in the country = #600 (300+200+100)
Total commodity in the country: 60 kgs of rice.
Since they use their entire wealth to buy this commodity only, the price of rice would be = #10 per kg (600/60).
At this rate, Obinna can buy 30kg of rice, Funke buys 20kg and Musa buys 10kg of rice.

One day they get hold of a currency-printing machine. They decided to double their money by simply printing more notes.
Now they have Naira 600, 400 and 200 respectively.
Total wealth now = Naira 1200
But total commodity in the country is still 60kgs of rice.
The new price of rice = 1200/60 = #20 per kg
They go to buy the rice. With 600 bucks, Obinna would still be able to buy the same 30kgs only, Funke 20kg and Musa 10kg! Damn! They realised how futile it was to print those notes.
Merely printing of notes doesn't do good to anyone. If the total money supply is increased disproportionately to the increase of goods (and services) in the country, it only leads to devaluation of the currency. Although their wealth doubled, the value of their currency got halved.
Therefore, to really become rich, they need to increase production of goods (and services as well), in addition to the money supply. Had the supply of rice also doubled along with the doubling of their money, the price of rice would have remain unchanged. With their new increased wealth they would have been able to buy double the amount of rice than they could before. That's what would have made them "wealthier" in the real sense.

You may extend the same concept to the entire country. If the CBN prints billions of Naira and doubles everyone's wealth, the cost of everything in the country would double.
This can also be understood from the simple law of demand and supply. If everybody has got more money out of nowhere, the demand of every goods and service would also increase almost commensurately (since everybody becomes rich, everybody now wants to own a Mercedes, fly in a business class, buy more fruits and chocolates). This would lead to an increase in the price of all the goods and services in the country (inflation).
Therefore to become rich, the country (its people) has to increase its production. That's the reason why countries are crazy about GDP (a measure of production).

Wooooow, you couldn't have simplified it further. You'll make a great teacher...

Gbajure:
He is not only a good financial analyst, he is deeply thoughtful dude. Whereas you come out as poorly informed and badly educated.
1. Read up on quantitative easing.
2. Answer the questions he brilliantly put together.

Nigeria cannot do quantitative easing. We cannot export our inflation like the US and European Union.

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?

Price control does not work in a capitalist economy

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.

You spoiled your speech with the last statement.
Obi who is a dullard is who you're planning to hand over Nigeria to.
He will handle it the way anambra is, deserted!
Someone who imports common tin tomatoes and is even proud of it.
But suddenly he realizes the country is too dependent on imports.

Say something else abeg.

PHIPEX:
Price control does not work in a capitalist economy

But we run a mixed economy

����

I am really glad to read a lot of analysis on here. We were all thought (in economics) that printing more money would lead to inflation.
However we have not heard about any currency printing lately here in Nigeria, then what has been the reason for the hyperinflation going on in Nigeria?
Prices of goods are now doubled

You asked a question and you answered it. If you print money and share it to everyone including the founder of the company, why do you think he would spend his own to go build or run a company to make something that probably nobody would need. Don't tell me people would need it because if you satisfy the primary needs of man, you would be marvelled at what type of demands you would be having. If America prints her money as china prints too, why do you think they need to borrow from anyone. Bottom line who would make the scarce resources available to work in the printing mill? If you have $1m like everyone else, would you be an employee in a factory to help in printing the bills? So because resources are scarce, demands exist which must be met with supply. These are simple terms to explain complex principles so stop harbouring such notion

jumper524:
Bros in a financial analyst and I've always maintained this perspective.
Many financial policy are not real, they are all artificial and several factors make them happen.
Printing more money knowingly leads to artificial inflation but secretly still maintains the economic situation.

Modified: a simple question to all those relegated minds calling me fools. Those who don't have the balls to question status quo.

1, Why do countries borrow when they have money in their external reserves.

2, if countries like USA, CHINA, UK e. t. c are the top debtors in the world, which countries come dey borrow them the money?

Ever asked yourself why can't cbn print more naira and sell our crude oil in Naira so Europeans can source for our local currency.