₦airaland Forum

datjukunboi:
nice post, I was initially convinced with your point until this thought popped up. is borrowing cheaper than printing in the short term or long term? seeing that a large percentage of our national budget goes in merely servicing our debts from money borrowed taking donkey years to pay up such loans and invariably costing five times the initial borrowed amount.

datjukunboi:
Also reminded me of the movie I watched in childhood (The rise and fall of Idi Amin). The Conversation went thus:
Gov: We can't print more money, It'll make our currency as worthless as tissue paper

Amin: What? you call uganda money shi*t paper? Mallam Mugu (calling his aide) take this man away and show him what we do with sh*t (Gov brisk away to be imprisoned /killed & new Gov appointed on the spot that agreed to print more money.

Have you noticed that most of these dictators make decisions contrary to the west and despite international sanctions they achieve monumental advancement and development for their countries amidst Human Rights violations and their western friendly successors tend to underachieve?

9jakohai:
Because....inflation

Many often ask why government’s don’t print more money to deal with the problem of national debt.

The reason is that printing more money doesn’t increase economic output in any way – it merely causes inflation.

Suppose an economy produces £10 million worth of goods; e.g. 1 million books at £10 each.
If the government doubled the money supply, we would still have 1 million books, but people have more money. Demand for books would rise, and firms would push up prices.
The most likely scenario is that if the money supply were doubled, we would have 1 million books sold at £20. The economy is now worth £20 million rather than £10 million. But, the number of goods is exactly the same.
We can say that the increase in GDP is a money illusion. – True you have more money, but if everything is more expensive, you are not any better off.
In this simple model, printing more money has made goods more expensive, but hasn’t changed the quantity of goods.

[left][/left]

https://www.economicshelp.org/blog/634/economics/the-problem-with-printing-money/

See what happened in ZImbabwe and Germany 1919-24

TimeMod3:
Do you consider your exchange value and the effects of inflation?
1million Zimbabwean dollars could only buy a bottle of beer. Are you ready to buy a loaf of bread for #2000?

samofson:
It is possible to create more money without causing inflation . The US used quantitative easing in 2008 to help get them out of the recession. CBN would have to be very smart in doing so . The problem for me is I don't trust CBN has the intelligence to do this.

QE is when the central bank creates more money electronically and uses it to buy up financial assets like bond etc. This helps to stimulate the private sector and control inflation cause the money is not being flooded into the open market.

So in a way creating more money for a particular use can help but like I said I don't trust the CNN to do it properly . It may become another way to loot

datjukunboi:
I beg to disagree with this assertion unless if you can proof with facts. You mean in essence that when I spend 100 Naira to buy/pay for a service it's actually worth more what am paying for? it doesn't add up and makes no economic sense for cost of production to surpass value of product.

datjukunboi:
I beg to disagree with this assertion unless if you can proof with facts. You mean in essence that when I spend 100 Naira to buy/pay for a service it's actually worth more what am paying for? it doesn't add up and makes no economic sense for cost of production to surpass value of product.

IamaNigerianGuy:
Yahoo boys may contribute to inflation in the micro economy. In cities suburbs where they live, they can drive up rent or the price of cars and clothes for instance; this is mostly a localized effect however. One must also realize that demand for goods and services is depressed in most of Nigeria due to low purchasing power and high unemployment. Hence, the increase in demand fueled by 'yahoo' money is viewed in a positive light by vendors and the yahoo money supply they bring in is not enough to cause widespread or systemic or national inflation.

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

dataking:
It is you that is a dullard. America prints dollars when ever its needed and dumps it on the world. They are the worst currency manipulators in the world but no other nation is allowed to try such cause its an American world we live in. Read more about it.

abescom:
China practically imports nothing. While countries like America buy plenty stuffs from China. America buys a lot of means when China devalues their currency, America have to pay more to buy from China.

Simply put - China de-valuate ( heir currency knowing a weaker yuan will boost their export against other nations that buy from China - including America which is why America didn't like it as most of their deals are more EXCHANGE deals.

Switzerland did same when they de-linked their economy from the Euro.

For instance if 5 yuan equals 1 dollar. This means when China sells something worth 1 dollar to America they get 5 yuan but when the the yuan is devalued, to say 6 yuan to one dollar, they get 6 yuan for one dollar but when they have to buy from the yanks, they spend less. This logic however only works for a very productivity economy as China's. They practically don't have to import but instead export.

In Nigeria terms, imagine we have to export so much crude and don't have to import much. We will buy making more money while spending less. China can afford it, Nigeria can't.

Ugosample:
They don't just print money anyhow

dataking:
It seems America pays you to defend them on nairaland. Ass licker

9jakohai:
Because....inflation

Many often ask why government’s don’t print more money to deal with the problem of national debt.

The reason is that printing more money doesn’t increase economic output in any way – it merely causes inflation.

Suppose an economy produces £10 million worth of goods; e.g. 1 million books at £10 each.
If the government doubled the money supply, we would still have 1 million books, but people have more money. Demand for books would rise, and firms would push up prices.
The most likely scenario is that if the money supply were doubled, we would have 1 million books sold at £20. The economy is now worth £20 million rather than £10 million. But, the number of goods is exactly the same.
We can say that the increase in GDP is a money illusion. – True you have more money, but if everything is more expensive, you are not any better off.
In this simple model, printing more money has made goods more expensive, but hasn’t changed the quantity of goods.

[left][/left]

https://www.economicshelp.org/blog/634/economics/the-problem-with-printing-money/

See what happened in ZImbabwe and Germany 1919-24

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

Ugosample:
What are you talking about?

Do You know how quantitative easing works?

From the way you spoke, you don't.

what sort of mentality do you even have sef?

dataking:
Mumu