Cyberterror:



This is what I wanted to type now. Good to know you are thinking straight not like the other clowns in this thread. This is what countries like America, UK and Canada have been secretly doing for ages but they will tell Africans and Latin Americans not to do same using mumbo jumbo economic fear mongering and clowns will buy hook, line and sinker.

Well, Zimbabwe printed their own currency excessively. I'm sure we all know what happened to it

Claudiusdeux:
1.Printing money involves us using scarce foreign reserves to do the job (because most of our currency is printed abroad).

2.Out of the same scarce reserves, we also pay our debts and pay for the running of the country.

3.Also, printing more money=inflation, and eventually a fall in the value of the Naira.

4.Naira can only become more strong if we are more productive.

5.Our creditors want their cash in dollars, not in Naira.

(NOT AN EXPERT....someone can do better than me!)

remove inflation from that list, inflation from excess cash in the economy can't be the reason for us.
there's cash shortage in the country and we know that, people are buying products and are unable to sell them cos no cash in the country.
many state workers are being owed and now the federal government are towing the part of state govt.
if dem no pay workers, who go buy food?

Claudiusdeux:


The US debt that has grown by 200% since 2008...and is now $27trillion.

The US has a strong currency largely because it is a producing nation, not a over-importing nation like Nigeria.

Just like China , which went from being behind Sierra Leone in 1973 GDP wise...to being a strong nation with a strong currency by being a manufacturing nation.

And thus the US can afford to print money because its economic activity is commensurate with that activity. Nigeria isn't that productive enough.

this na the English part of the who illegalities going on in the foreign exchange and financial policy.

truth is there are many illegalities behind all the English economics taught us.

I studied finance and won't want to go into details but truth is foreign exchange policy and world bank are all scammers.

the US is stronger than kuwait in terms of production but kuwait currency is stronger, china is stronger than UK in terms of production yet euros is stronger than yen.

guy forgot watin economics teach you jare.

iran currency won't be exchanging for over 50k to dollar if economics were to be fair.

jumper524:
remove inflation from that list, inflation from excess cash in the economy can't be the reason for us.
there's cash shortage in the country and we know that, people are buying products and are unable to sell them cos no cash in the country.
many state workers are being owed and now the federal government are towing the part of state govt.
if dem no pay workers, who go buy food?

Sense keee you there

Cyberterror:



This is what I wanted to type now. Good to know you are thinking straight not like the other clowns in this thread. This is what countries like America, UK and Canada have been secretly doing for ages but they will tell Africans and Latin Americans not to do same using mumbo jumbo economic fear mongering and clowns will buy hook, line and sinker.

This thread is making me laugh i swear. It seems most people here didn't take economics as a serious subject in secondary school. Most of my students in SS 2 will conveniently answer this question.

Rhapsodia I just weak after seeing all the comments. God!

Listen, the Central Bank of Nigeria prints money every year like every other government and they announced it. The issue is people don't read those reports or even understand their importance.

Between 2013 and 2018, the CBN spent N231.2 billion printing about N6.5 trillion. Nigeria has a 4 billion notes printing capacity per annum and printed 2.7 billion notes in 2018 despite projecting 3.35 billion notes.

It is normal that the government print money to cushion the economy and stimulate growth. In economics, it is called quantitative easing (QE) and does not directly translate to inflation as most people have stated above. Inflation results from low economic productivity, a situation where demand is higher than supply (cost-push inflation) or in a healthy economy where more earnings, household income and spending power of consumers continue to rise leading to surge in demand than the aggregate goods that the economy can produce (demand-pull inflation).

Here is why our QE has not been effective like the USA, Euro, Japan and others.

The difference is in the deployment. The CBN inject printed MONEY back into the economy through treasury bills, bond sales, generally capital market. The CBN sells those to raise capital and in return pay investors (their capital plus interest (yield)) when those mature. It pays them from the money printed while the government uses that money raised to finance capital projects.

In fact, you might have heard of N5 trillion that banks and some other individuals owe AMCON, that money comes from the CBN printed money used in acquiring bad debt to prevent job loss and catastrophe in the banking sector. CBN acquired those debts with their expected interests (debt monetization) to keep the banking sector afloat.

In the US, the Federal Reserve (US Central Bank) used QE to buy mortgage-backed loan products, debts of Small and Medium loan providing companies and organisations to ensure that people and companies affected by COVID-19, bad economy, etc can still function and continue to contribute to the larger economy. For instance, small and medium business loan focus companies in the US are currently ready to loan anything for any willing business because the US government has to told them it will buy all their debt. Meaning, they should not be concerned with rising bad debt but focus on borrowing based on certain criteria to ensure all hands are on deck to aid economic recovery. It means by keeping organisations in business new job creation will continue to increase and job loss during the peak of COVID-19 will gradually moderate while the US government bear all the cost until those businesses are back on their feet to pay back those loan at ZERO interest rate.

In Nigeria, the money goes into the economy through the elites while the manufacturing and businesses continue to struggle with high-interest rates. US lowered interest rate from 1 percent to Zero and still buy all the debts to ensure loan companies also do not plunge into debt without interest rates used in covering operating costs.

Please note that US and other developed nations always know the total amount printed and injected into their economy and when the economy recovered from recession they always withdraw it back. Hence, while they've been able to manage their inflation/money in circulation better.

It is simple, an economy produces what it needs to survive. The printing of money or QE is to engineer it back to that level following an economic crisis and then take it back to allow it to function independently.

I am not sure Nigeria can account for her QE. For instance, I can tell you US total QE as at today is about $700 billion, I can't say that about Nigeria.

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Truth234:
Rhapsodia I just weak after seeing all the comments. God!

Listen, the Central Bank of Nigeria prints money every year like every other government and they announced it. The issue is people don't read those reports or even understand their importance.

Between 2013 and 2018, the CBN spent N231.2 billion printing about N6.5 trillion. Nigeria has a 4 billion notes printing capacity per annum and printed 2.7 billion notes in 2018 despite projecting 3.35 billion notes.

It is normal that the government print money to cushion the economy and stimulate growth. In economics, it is called quantitative easing (QE) and does not directly translate to inflation as most people have stated above. Inflation results from low economic productivity, a situation where demand is higher than supply (cost-push inflation) or in a healthy economy where more earnings, household income and spending power of consumers continue to rise leading to surge in demand than the aggregate goods that the economy can produce (demand-pull inflation).

Here is why our QE has not been effective like the USA, Euro, Japan and others.

The difference is in the deployment. The CBN inject printed MONEY back into the economy through treasury bills, bond sales, generally capital market. The CBN sells those to raise capital and in return pay investors (their capital plus interest (yield)) when those mature. It pays them from the money printed while the government uses that money raised to finance capital projects.

In fact, you might have heard of N5 trillion that banks and some other individuals owe AMCON, that money comes from the CBN printed money used in acquiring bad debt to prevent job loss and catastrophe in the banking sector. CBN acquired those debts with their expected interests (debt monetization) to keep the banking sector afloat.

In the US, the Federal Reserve (US Central Bank) used QE to buy mortgage-backed loan products, debts of Small and Medium loan providing companies and organisations to ensure that people and companies affected by COVID-19, bad economy, etc can still function and continue to contribute to the larger economy. For instance, small and medium business loan focus companies in the US are currently ready to loan anything for any willing business because the US government has to told them it will buy all their debt. Meaning, they should not be concerned with rising bad debt but focus on borrowing based on certain criteria to ensure all hands are on deck to aid economic recovery. It means by keeping organisations in business new job creation will continue to increase and job loss during the peak of COVID-19 will gradually moderate while the US government bear all the cost until those businesses are back on their feet to pay back those loan at ZERO interest rate.

In Nigeria, the money goes into the economy through the elites while the manufacturing and businesses continue to struggle with high-interest rates. US lowered interest rate from 1 percent to Zero and still buy all the debts to ensure loan companies also do not plunge into debt without interest rates used in covering operating costs.

Please note that US and other developed nations always know the total amount printed and injected into their economy and when the economy recovered from recession they always withdraw it back. Hence, while they've been able to manage their inflation/money in circulation better.

It is simple, an economy produces what it needs to survive. The printing of money or QE is to engineer it back to that level following an economic crisis and then take it back to allow it to function independently.

I am not sure Nigeria can account for her QE. For instance, I can tell you US total QE as at today is about $700 billion, I can't say that about Nigeria.

Perfect Description. There's a lot to learn from you.

Oh gosh!

It is thoughts like these that put us in debt and poverty.

It is thoughts like these that'll make us the poverty capital of the world.

Stop thinking like this.

---

Imagine you borrow #10 million from a friend and you have #10 million in your account.

The moment the borrowed money lands in your account what you have is #20 million. Economically, what you have is #0. This is assuming the interest rate is zero.

If someone pays off your debt you will be #10 million richer without doing anything.

Imagine tomorrow you borrow #50 million and another person pays it off.

Now that you are assured no matter what you borrow someone will pay it, will you value the money? Is the money scarce any longer?

If you remember in Businesses Studies class in junior secondary, we were told about the characteristics of money.

Scarce.
Valuable.
Portable. Amongst others.

The moment money loses any of this characteristics inflation creeps in. Inflation is like economical disaster. The goods will become valuable than the money.

This scenario you painted is an indirect way of saying we should keep pumping money into the country to ease hardship. Think about it.

It's like saying we borrow money we'll never pay back.

It's like saying we should not work for money.

Just keep borrowing and borrowing and borrowing then print to pay back.


It's like playing a game where you always win no matter whom you play against. How fun is such a game?

Truth234:
Rhapsodia I just weak after seeing all the comments. God!

Listen, the Central Bank of Nigeria prints money every year like every other government and they announced it. The issue is people don't read those reports or even understand their importance.

Between 2013 and 2018, the CBN spent N231.2 billion printing about N6.5 trillion. Nigeria has a 4 billion notes printing capacity per annum and printed 2.7 billion notes in 2018 despite projecting 3.35 billion notes.

It is normal that the government print money to cushion the economy and stimulate growth. In economics, it is called quantitative easing (QE) and does not directly translate to inflation as most people have stated above. Inflation results from low economic productivity, a situation where demand is higher than supply (cost-push inflation) or in a healthy economy where more earnings, household income and spending power of consumers continue to rise leading to surge in demand than the aggregate goods that the economy can produce (demand-pull inflation).

Here is why our QE has not been effective like the USA, Euro, Japan and others.

The difference is in the deployment. The CBN inject printed MONEY back into the economy through treasury bills, bond sales, generally capital market. The CBN sells those to raise capital and in return pay investors (their capital plus interest (yield)) when those mature. It pays them from the money printed while the government uses that money raised to finance capital projects.

In fact, you might have heard of N5 trillion that banks and some other individuals owe AMCON, that money comes from the CBN printed money used in acquiring bad debt to prevent job loss and catastrophe in the banking sector. CBN acquired those debts with their expected interests (debt monetization) to keep the banking sector afloat.

In the US, the Federal Reserve (US Central Bank) used QE to buy mortgage-backed loan products, debts of Small and Medium loan providing companies and organisations to ensure that people and companies affected by COVID-19, bad economy, etc can still function and continue to contribute to the larger economy. For instance, small and medium business loan focus companies in the US are currently ready to loan anything for any willing business because the US government has to told them it will buy all their debt. Meaning, they should not be concerned with rising bad debt but focus on borrowing based on certain criteria to ensure all hands are on deck to aid economic recovery. It means by keeping organisations in business new job creation will continue to increase and job loss during the peak of COVID-19 will gradually moderate while the US government bear all the cost until those businesses are back on their feet to pay back those loan at ZERO interest rate.

In Nigeria, the money goes into the economy through the elites while the manufacturing and businesses continue to struggle with high-interest rates. US lowered interest rate from 1 percent to Zero and still buy all the debts to ensure loan companies also do not plunge into debt without interest rates used in covering operating costs.

Please note that US and other developed nations always know the total amount printed and injected into their economy and when the economy recovered from recession they always withdraw it back. Hence, while they've been able to manage their inflation/money in circulation better.

It is simple, an economy produces what it needs to survive. The printing of money or QE is to engineer it back to that level following an economic crisis and then take it back to allow it to function independently.

I am not sure Nigeria can account for her QE. For instance, I can tell you US total QE as at today is about $700 billion, I can't say that about Nigeria.

Boss thanks for the enlightenment and free lecture,
Now I have better understanding of QE.
It is well appreciated. Thumbs up!

Sammy07:


Sir, did you do econometrics?
How can you use printed money to settle debts?
Do you know the rationale behind printing money?
Naira will be devalued, people will be poorer.

Don't you know that money is being regulated?

Lol, so you think they'll just print money and ask China for their account number and Nigeria will just send am Gbam?

Yoruba moslem wetin concern econometrics with printing of money, settling of debts and devaluation? These fall under macroeconomics while econometrics is used across all the branches of economics to make projections.

Studying econometric will not teach him how printing money affects the economy rather how a unit increase in money supply affects inflation and other macroeconomic variables.

Be guided.

Go read your economics well,printin money without attachin it to valuable comodity exchange is causing more inflation.Is just like paper without value,havin more cash chasing few comodities..As govt it is the money that you earn or borrow hedged in your reserve can be circulated for medium of exchange to keep the economy stable and running.
that is why tinubu is mischievous for sayin they should print money because he knows it wil crash the sys.
Naija ppl no dey read again,even when these old fools wey no go school don dabaru una edu does mean yu should starve yu sef of vital knowledge of life and living well.

You will end up buying a loaf of bread with a wheel Barrow of naira

Sammy07:


Reasons.

1. introduce hyper - inflation
2. destroy the value of the Naira
3. cripple manufacturing
4. prepare for mass unemployment
5. destroy your standing in international financial markets


Op if you're a farmer and suddenly you jam plenty money, will u farm again? I bet no. So what will happen to the ppl that buys the food from u? Same wit doc, hair dresser, lecturers etc non of em will waanna work again.

perfectly analysis but the topic of the thread says "print money to pay foreign debts"

Cyberterror:


You are wrong. The printed money will be used to settle foriegn creditors which means it won't circulate in the local economy.

maybe he didn't read the title of the thread properly

Truth234:
Rhapsodia I just weak after seeing all the comments. God!

Listen, the Central Bank of Nigeria prints money every year like every other government and they announced it. The issue is people don't read those reports or even understand their importance.

Between 2013 and 2018, the CBN spent N231.2 billion printing about N6.5 trillion. Nigeria has a 4 billion notes printing capacity per annum and printed 2.7 billion notes in 2018 despite projecting 3.35 billion notes.

It is normal that the government print money to cushion the economy and stimulate growth. In economics, it is called quantitative easing (QE) and does not directly translate to inflation as most people have stated above. Inflation results from low economic productivity, a situation where demand is higher than supply (cost-push inflation) or in a healthy economy where more earnings, household income and spending power of consumers continue to rise leading to surge in demand than the aggregate goods that the economy can produce (demand-pull inflation).

Here is why our QE has not been effective like the USA, Euro, Japan and others.

The difference is in the deployment. The CBN inject printed MONEY back into the economy through treasury bills, bond sales, generally capital market. The CBN sells those to raise capital and in return pay investors (their capital plus interest (yield)) when those mature. It pays them from the money printed while the government uses that money raised to finance capital projects.

In fact, you might have heard of N5 trillion that banks and some other individuals owe AMCON, that money comes from the CBN printed money used in acquiring bad debt to prevent job loss and catastrophe in the banking sector. CBN acquired those debts with their expected interests (debt monetization) to keep the banking sector afloat.

In the US, the Federal Reserve (US Central Bank) used QE to buy mortgage-backed loan products, debts of Small and Medium loan providing companies and organisations to ensure that people and companies affected by COVID-19, bad economy, etc can still function and continue to contribute to the larger economy. For instance, small and medium business loan focus companies in the US are currently ready to loan anything for any willing business because the US government has to told them it will buy all their debt. Meaning, they should not be concerned with rising bad debt but focus on borrowing based on certain criteria to ensure all hands are on deck to aid economic recovery. It means by keeping organisations in business new job creation will continue to increase and job loss during the peak of COVID-19 will gradually moderate while the US government bear all the cost until those businesses are back on their feet to pay back those loan at ZERO interest rate.

In Nigeria, the money goes into the economy through the elites while the manufacturing and businesses continue to struggle with high-interest rates. US lowered interest rate from 1 percent to Zero and still buy all the debts to ensure loan companies also do not plunge into debt without interest rates used in covering operating costs.

Please note that US and other developed nations always know the total amount printed and injected into their economy and when the economy recovered from recession they always withdraw it back. Hence, while they've been able to manage their inflation/money in circulation better.

It is simple, an economy produces what it needs to survive. The printing of money or QE is to engineer it back to that level following an economic crisis and then take it back to allow it to function independently.

I am not sure Nigeria can account for her QE. For instance, I can tell you US total QE as at today is about $700 billion, I can't say that about Nigeria.

Can't we print to induce productivity since what we are all concerned about is the economic growth, I'm referring to industrialisation not setting up of fuel station, hotels, etc.
The MPR rate should be reduced so interest rate can come down, the interest on savings should remain low so people don't dump their money just to yield interest instead of engaging in a productive economic activity.
We now have a uniform identity with BVN, so the fear of debtors running off with fund is close to zero except aided by bank officials. So, why can't loan criteria be eased and granted according to the capacity of such individual using his history.

OlujobaSamuel:

Can't we print to induce productivity since what we are all concerned about is the economic growth, I'm referring to industrialisation not setting up of fuel station, hotels, etc.
The MPR rate should be reduced so interest rate can come down, the interest on savings should remain low so people don't dump their money just to yield interest instead of engaging in a productive economic activity.
We now have a uniform identity with BVN, so the fear of debtors running off with fund is close to zero except aided by bank officials. So, why can't loan criteria be eased and granted according to the capacity of such individual using his history.

That is exactly what printing of money is meant for, to stimulate productivity. However, what our government has been doing is to use it to finance capital projects because of our huge infrastructure deficit and our inability to bring cost of printing down.

We spent N231 billion to print notes valued at N6.5 trillion, meaning we are spending about 4% to print up until 2018 on average. With the current devaluation and logistic constrain due to COVID-19 that amount will be like 8 to 10%. Hence, why foreign borrowing under president Muhammadu Buhari suddenly became lucrative.

Also, it is impossible to print to industralise an economy because that will means government will own most of the establishment (communism). You can only use printed money to stimulate growth in that direction by reducing interest rate but we can't given that is how we attract foreign investors to loan us our now preferred foreign loan.

Our high interest rate (11.5%) when compared to US, others that are zero is the reason foreign investors are still looking our way with all the risk associated with our investments.

Nigeria needs to find a way to reduce cost at all level.

VeeVeeMyLuv:

Boss thanks for the enlightenment and free lecture,
Now I have better understanding of QE.
It is well appreciated. Thumbs up!

You are welcome sir.

Cyberterror:



This is a very good idea. The secret behind America's prosperity is that their Federal reserve prints billions of dollars yearly to settle their foriegn debts.

This is a secret that only legends would understand....



watch YouTube videos Tagged "Americans against America"

*you'll understand better*

Claudiusdeux:
1.Printing money involves us using scarce foreign reserves to do the job (because most of our currency is printed abroad).

2.Out of the same scarce reserves, we also pay our debts and pay for the running of the country.

3.Also, printing more money=inflation, and eventually a fall in the value of the Naira.

4.Naira can only become more strong if we are more productive.

5.Our creditors want their cash in dollars, not in Naira.

(NOT AN EXPERT....someone can do better than me!)

If Nigeria gets to print her money, she can buy dollars in black market off abokis and pay for whatever debts

Claudiusdeux:
1.Printing money involves us using scarce foreign reserves to do the job (because most of our currency is printed abroad).

2.Out of the same scarce reserves, we also pay our debts and pay for the running of the country.

3.Also, printing more money=inflation, and eventually a fall in the value of the Naira.

4.Naira can only become more strong if we are more productive.

5.Our creditors want their cash in dollars, not in Naira.

(NOT AN EXPERT....someone can do better than me!)

If Nigeria gets to print her money, she can buy dollars in black market off ab0kis and pay for whatever debts

Rhapsodia:
Good evening Nairalanders

Please help me understand some things in governance.

Considering the huge debt the country is faced with under this Buhari's Government, why can't the government the print money in the CBN and pay the lenders??

Thank you so much.

Naptu2 ...baba please help out this generation!

It will work if only they have the equivalent of the amount of dollars they are owing in Nigerias foreign reserve. If for example they print the equivalent of 5 billion dollars in Naira but don't have 5billion dollars in foreign reserve to settle the debt then there will be a problem. Another thing is that there will be so much money in circulation, but if they can be careful enough to control the amount of money in circulation and use the excess to solve infrastructure problems or settle civil servants that are being owed for months, solve ASUU problems, give grants then there should not be a problem.

All we need is a stable and peaceful environment. I am not an Economics Expert. But this is what I know. The productivity of Nigerians 20years ago is not the same as today irrespective of our political leaders.

Nigeria is not good..... But in this bad economy, we are seeing organizations giving out soft loans with little or no collateral. In this bad economy, I'm seeing a lot of small businesses thriving. In this bad economy the Mortgage industry is booming. In this bad economy, the business relationship with the outside world is getting better.

Nigeria is getting better! Don't let's it destroy with our Cynicism.

Sammy07:


Money must be scarce so that it can have value.

sad to know that many people haven't realised that economics has scammed them.

dollar is surplus in the us, infact getting 100dollar can take an unskilled labourer just 2 days of odd jobs to get (min wage of 11dollar per hour) yet the currency is very much strong and has value.

here in naija and unskilled labourer with connection can at most get 7k in two days yet the naira is useless.

there's a reason why nigeria is trading much with china cos the us ain't making life easy atall with their lies and scam exchange rate.

in 2015 I was told increase in local production would strengthen the naira and increase in export would also do well to the naira.

2015 came, oil price dropped, local production increased. naira crashed(why)

2017 oil price stabilized (increased to about $65 per barrel) to a certain extent, local production has started yielding results yet the naira refused to appreciate.

covid came again, the demand for dollar locally reduced as people were no longer traveling abroad, yet the naira crashed again?

take it or leave it, if something drastic is not done about it, we would never be able to grow as a nation..

at this point, I encourage artificial control by printing more money so people can use those money and invest.

if Nigeria print 20 billion naira cash, my brother no inflation go happen.

Cyberterror:



This is what I wanted to type now. Good to know you are thinking straight not like the other clowns in this thread. This is what countries like America, UK and Canada have been secretly doing for ages but they will tell Africans and Latin Americans not to do same using mumbo jumbo economic fear mongering and clowns will buy hook, line and sinker.

Are you an economist? Speaking out of ignorance confidently doesnt make you wise.

Rhapsodia:
Good evening Nairalanders

Please help me understand some things in governance.

Considering the huge debt the country is faced with under this Buhari's Government, why can't the government the print money in the CBN and pay the lenders??

Thank you so much.

Check what happened in Zimbabwe, that should provide a clue.

Truth234:


That is exactly what printing of money is meant for, to stimulate productivity. However, what our government has been doing is to use it to finance capital projects because of our huge infrastructure deficit and our inability to bring cost of printing down.

We spent N231 billion to print notes valued at N6.5 trillion, meaning we are spending about 4% to print up until 2018 on average. With the current devaluation and logistic constrain due to COVID-19 that amount will be like 8 to 10%. Hence, why foreign borrowing under president Muhammadu Buhari suddenly became lucrative.

Also, it is impossible to print to industralise an economy because that will means government will own most of the establishment (communism). You can only use printed money to stimulate growth in that direction by reducing interest rate but we can't given that is how we attract foreign investors to loan us our now preferred foreign loan.

Our high interest rate (11.5%) when compared to US, others that are zero is the reason foreign investors are still looking our way with all the risk associated with our investments.

Nigeria needs to find a way to reduce cost at all level.

You are right though, just feel we should go rogue with our monetary policy outside the textbook rule, maybe it can change our system

Truth234:
Rhapsodia I just weak after seeing all the comments. God!

Listen, the Central Bank of Nigeria prints money every year like every other government and they announced it. The issue is people don't read those reports or even understand their importance.

Between 2013 and 2018, the CBN spent N231.2 billion printing about N6.5 trillion. Nigeria has a 4 billion notes printing capacity per annum and printed 2.7 billion notes in 2018 despite projecting 3.35 billion notes.

It is normal that the government print money to cushion the economy and stimulate growth. In economics, it is called quantitative easing (QE) and does not directly translate to inflation as most people have stated above. Inflation results from low economic productivity, a situation where demand is higher than supply (cost-push inflation) or in a healthy economy where more earnings, household income and spending power of consumers continue to rise leading to surge in demand than the aggregate goods that the economy can produce (demand-pull inflation).

Here is why our QE has not been effective like the USA, Euro, Japan and others.

The difference is in the deployment. The CBN inject printed MONEY back into the economy through treasury bills, bond sales, generally capital market. The CBN sells those to raise capital and in return pay investors (their capital plus interest (yield)) when those mature. It pays them from the money printed while the government uses that money raised to finance capital projects.

In fact, you might have heard of N5 trillion that banks and some other individuals owe AMCON, that money comes from the CBN printed money used in acquiring bad debt to prevent job loss and catastrophe in the banking sector. CBN acquired those debts with their expected interests (debt monetization) to keep the banking sector afloat.

In the US, the Federal Reserve (US Central Bank) used QE to buy mortgage-backed loan products, debts of Small and Medium loan providing companies and organisations to ensure that people and companies affected by COVID-19, bad economy, etc can still function and continue to contribute to the larger economy. For instance, small and medium business loan focus companies in the US are currently ready to loan anything for any willing business because the US government has to told them it will buy all their debt. Meaning, they should not be concerned with rising bad debt but focus on borrowing based on certain criteria to ensure all hands are on deck to aid economic recovery. It means by keeping organisations in business new job creation will continue to increase and job loss during the peak of COVID-19 will gradually moderate while the US government bear all the cost until those businesses are back on their feet to pay back those loan at ZERO interest rate.

In Nigeria, the money goes into the economy through the elites while the manufacturing and businesses continue to struggle with high-interest rates. US lowered interest rate from 1 percent to Zero and still buy all the debts to ensure loan companies also do not plunge into debt without interest rates used in covering operating costs.

Please note that US and other developed nations always know the total amount printed and injected into their economy and when the economy recovered from recession they always withdraw it back. Hence, while they've been able to manage their inflation/money in circulation better.

It is simple, an economy produces what it needs to survive. The printing of money or QE is to engineer it back to that level following an economic crisis and then take it back to allow it to function independently.

I am not sure Nigeria can account for her QE. For instance, I can tell you US total QE as at today is about $700 billion, I can't say that about Nigeria.

Boss, may God bless you immediately...this explanation is detailed and easy to understand...I appreciate.

jumper524:
sad to know that many people haven't realised that economics has scammed them.

dollar is surplus in the us, infact getting 100dollar can take an unskilled labourer just 2 days of odd jobs to get (min wage of 11dollar per hour) yet the currency is very much strong and has value.

here in naija and unskilled labourer with connection can at most get 7k in two days yet the naira is useless.

there's a reason why nigeria is trading much with china cos the us ain't making life easy atall with their lies and scam exchange rate.

in 2015 I was told increase in local production would strengthen the naira and increase in export would also do well to the naira.

2015 came, oil price dropped, local production increased. naira crashed(why)

2017 oil price stabilized (increased to about $65 per barrel) to a certain extent, local production has started yielding results yet the naira refused to appreciate.

covid came again, the demand for dollar locally reduced as people were no longer traveling abroad, yet the naira crashed again?

take it or leave it, if something drastic is not done about it, we would never be able to grow as a nation..

at this point, I encourage artificial control by printing more money so people can use those money and invest.

if Nigeria print 20 billion naira cash, my brother no inflation go happen.

We are yet to meet our forex demands since 2015 till now because what you call increase in local production is not yielding much foreign exchange. We have failed to meet international export quality and most of our goods end up being destroyed as a result of this in the buying nations. Secondly, our national budget is not pegged to any other local product, it is only pegged to oil price, the consequence of this is that a crash in oil price will equally lead to a heavy crash in Naira. Talking about the Covid lockdown, the country sold no oil during that period, but have a lot of expenses on PEPS, drugs, medical equipments, kits etc. The implication of such expenditure was a depletion of our foreign reserve in other to cover expenses. The foreign reserve have been on a steady nosedive to show you that production and income into the country is dying. Check the chart below.

OlujobaSamuel:

You are right though, just feel we should go rogue with our monetary policy outside the textbook rule, maybe it can change our system

The bolded was the reason Singapore, Rwanda, Israel and other natural resources limited nations thrive. Nigeria is yet to have such leaders, she is indebted to IMF and still begging World Bank for $1.5 billion loan. These multilateral financial institutions dictate our policies. Happy Sunday boss!

Sammy07:


Sir, did you do econometrics?
How can you use printed money to settle debts?
Do you know the rationale behind printing money?
Naira will be devalued, people will be poorer.

Don't you know that money is being regulated?

Lol, so you think they'll just print money and ask China for their account number and Nigeria will just send am Gbam?

The guy funny.

FarahAideed:
Too many dull people in NIGERIA ..I can swear this OP voted Buhari

Maybe if u get to educate me, I might become brilliant and sensible like you....

And who knows, I might get to vote for your preferred sensible candidate in 2023...

Someone told me you know it all already...Good for you....but help me get to you level....

Peace.