₦airaland Forum

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You are so wrong

The person that made those useless policies is the elephant in the room!

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IAmHim1:
The policies have been made before you or I or the person was born

They're just players deep into the game
All we have to do is tell them there are ways where everyone can play and risk can be minimized with guaranteed profit


What's the gain if there's no food in the country and foreign investors are being driven away with their billion dollar investment$ all in the name of insurgency

What's the gain if you own a super car and all the nice things of life but you can't enjoy it because of bad road or fear of being stereotyped AND ROBBED by same poor people you impoverish

Nash equilibrium: Everyone should do what best for himself AND WHATS BEST FOR THE GROUP all for the betterment OF ONE SELF.
Selflessness with a glorious sprinkle of selfishness

Because with what's going on in the country economically, even those that impoverish the masses aren't smiling LIKE THEY'RE SUPPOSED TO

so you tend to ask yourself, "what's up?"

My broda, I just wonder what's up
You have said it all

IAmHim1:
I've written an in-depth analysis of this topic so I'll be brushing over the points I made here:
https://www.nairaland.com/8101772/nigerias-inflation-introduction-subsidy-old

So into the bone of this post


1) Introduction of subsidy on OLD okash, okay, palm credit, Branch, Carbon loans.

The subsidy to be introduced ONLY takes care of the interest rates being charged on these old loans AND it is for a limited time only to enable mass adoption

Nigeria, like the united States, runs a debt based economy and is currently experiencing inflation.

and guess what

For a debt-based economy to work, we need LOANS/DEBT. The moment all loans/debt is taken from Nigeria's economy, NIGERIA AS A COUNTRY WILL COLLAPSE

So by taking away *some* loans from the Economy, the excess money in circulation is massively reduced and the economy can still function.

2) Go HARDER in tackling INSURGENCY in the country.

INSURGENCY is the elephant in the pool in Nigeria's economy crisis. WHATEVER THE CBN DOES WILL NEVER WORK if insurgency isn't tackled.

Yes,

first of my name,
Breaker of chains,
prophet of doom

Point 1 WONT be EFFECTIVE if point 2 isn't implemented.

Insurgency(insecurity) not only drive away farmers that support local production from their farms BUT it also drives away investors looking to pour forex into the country as such investors won't feel themselves, their staffs and their investment would be safe.

With farmers not producing, Nigeria is forced to import food to feed its population by EXCHANGING the naira hence devaluing it and with forex leaving the country when foreign investors choose not to invest, our means of earning foreign exchange is further limited

Nigeria recently lost a $6 billion deal from totalenergies to Angola and here's what the CEO of Totalenergies, Patrick Pouyanne, has to say about the lost deal:

"What are the challenges? Security COMES FIRST. For a CEO like me, security of my people is of utmost importance."

3) Implement a 'floating' Fractional Reserve ratio system of economy

Nigeria recently increased interest rates. This action aims to discourage borrowing and encourage savings by its citizens.

But saving in commercial banks is how loans Is created via Fractional Reserve Banking. The lower the reserve ratio of a country, the more the currency in circulation and the higher the reserve ratio, the lesser the money being multiplied by the commercial banks in that country

Since the interest rates have been increased to encourage savings in commercial banks, and commercial banks need deposit to create loans, the fractional reserve ratio needs to be increased further UNTIL point 2 is taken care of, because if the money in circulation in a country is greater than the good being produced in that country, INFLATION is bound to happen.

NIGERIA HAS FEW TANGIBLE PRODUCTS IT PRODUCES

As I've always said, the price of food stuffs in the markets is NOT GOING UP. it's the value of money that's going down. That's why more money chase few goods than before -- money is losing value due to the newly created money NOT being backed by local production of goods. New money takes money from old money in circulation.


SECTION B

When the economy eventually picks up, and there is few money in the economy which might lead to a recession, what should our dear Nigeria do:

1) Introduce a negative interest rate charged on cash or electronic deposits kept in an account for MORE THAN A MONTH. this matches the time salary earners will receive their monthly salary so people are encouraged to withdraw their old salary because they will be expecting a new one by month end.

And since the negative interest rate will be charged monthly on dormant money, citizens will be safe financially

how's that for sound logic kiss

Negative interest rates is the reverse of positive/increased interest rate: people are encouraged to take loans AND PAY BACK LESS THAN THE AMOUNT THEY BORROWED grin grin and if they choose to save their money in banks, they will pay heavily for saving THEIR HARD EARNED MONEY grin

So the movement of currency from one account to another will give room for fractional reserve banking to multiply the money and stimulate the economy

And WHEN insurgency is tackled and farmers return back to their farms and foreign investors start trooping into the country to do business, THEN FRACTIONAL RESERVE RATIO SHOULD BE REDUCED

what do you think?
I'm open to constructive criticism

If you found this insightful, please share so others can read and gain value like you did. Thanks!

I never even thought of the ever rising rate of interest (old loans) on all these Carbon and Fairmoney apps. It's inflation at our fingertips! The government has to intervene somehow!

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IAmHim1:
Whenever the commercial banks give out loans, new money is being created in the system and if this new money isn't backed with the production of local goods TO MATCH, THAT'S INFLATION SPELLED OUT

Worst still if the borrowers of such loans DEFAULT on their loans because of interest rates to service the borrowed loans

---Farmers are not in their farms producing for the nation because of something... forcing us to use our naira to import food

---Big Investors like totalenergy are being driven out of Nigeria too BECAUSE OF SOMETHING... forcing us to rely mainly on oil sales as our forex inflow


That SOMETHING has crippled the NIGERIA economy
THAT SOMETHING IS THE MAIN PROBLEM OF NIGERIA. THATS THE ELEPHANT IN THE ROOM

AND THAT SOMETHING NEEDS TO BE THOROUGH DEALT WITH MERCILESSLY

This is what I was trying to explain to someone on here a couple of days ago. Increasing minimum wage is not the solution. It's even a funny notion to economists. You didn't show up to your business because of termite infestation, and then in the middle of the year you borrowed your friends money that they should pay back b4 the end but they didn't. You basically ran your business into the ground, then at the end of the year, you decide you want to increase your salary😂

We must actually get to work. The security agents must secure the country so we can increase agricultural production. The govt must use the money from oil subsidy to invest/provide jobs or return subsidy. And in the private sector, all the money we borrowed Dangote and others that caused inflation, they must begin to give it back or become productive. Dangote refinery must produce affordable refined oil to Nigerians

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