comatekeke:

Risk of default.
The company goes out of business
Both are unlikely but still possible.

Oshokhai69:
Lots of misinformation on this thread

zamirikpo:
Hello.....I know this must have been discussed here by....but with over 2000pages ,it'll be difficult to trace.

Well my concern is with this TB investment and the capacity of this government or the next to payback. I know govt can always print money but at wot point is it impossible to continue to print.

Nigerias debt profile is brutal......loan repayment is over 80% of our revenue.

I'm just concerned........uncertainty is too much

Oshokhai69:


Who is this one? Do you know CPs are short term instruments? You see MTN, Dangote or BUA defaulting in less than a year? I feel like giving you 20 strokes of the cane

adetunrayo:
Please refer to threads on bonds

Olaide1295:


When faced with two difficult options of either defaulting on its debt or printing more money to pay back (which causes inflation), the government will definitely chose the latter.
The former will cause immediate social unrest so it is not even better. CBN has no choice but to continue printing Naira for the foreseeable future. In other words, naira will continue depreciating unless the government finds a solution to the revenue and spending problems.

By the way, CBN has also printed about 20 trillion for the government which is not even recorded yet in our debt. Once it is added, the debt figures will balloon.

adetunrayo:
Please refer to threads on bonds

ositadima1:


Is it only CBN that prints money? Banks print money all the time when they lend money. What of the stock market? When a stock goes up, say 10%, everyone who owns that stuck commands new money and it doesn't matter that the individuals that caused the rise exchanged less than 1% of the outstanding stocks, and money can be destroyed during bears.

By the way, Nigeria is still better than some countries sha check below. That is Argentina, inflation has finished them.

ositadima1:


Is it only CBN that prints money? Banks print money all the time when they lend money. What of the stock market? When a stock goes up, say 10%, everyone who owns that stuck commands new money and it doesn't matter that the individuals that caused the rise exchanged less than 1% of the outstanding stocks, and money can be destroyed during bears.

By the way, Nigeria is still better than some countries sha check below. That is Argentina, inflation has finished them.

ositadima1:


Is it only CBN that prints money? Banks print money all the time when they lend money. What of the stock market? When a stock goes up, say 10%, everyone who owns that stuck commands new money and it doesn't matter that the individuals that caused the rise exchanged less than 1% of the outstanding stocks, and money can be destroyed during bears.

By the way, Nigeria is still better than some countries sha check below. That is Argentina, inflation has finished them.

ibechris:




This kind economics must be from another planet.
With all due respect to your personality,I think this is what I call economic terrorism.

This is not doable any where in the world. Banks don't print money.

keeper303:


Banks create credit which is similar to printing money. For your information, Central Bank don't have a printing press that prints money. What central bank does is to instruct the Security Printing and Minting Company to print a specified amount of money to replace defaced or badly damaged currency notes.

Oshokhai69:


Guy shut up there and stop misyearning and misinforming people..who told you that banks print money? That’s a very foolish talk. Only the central bank can print money!!!

I wish I could locate you and give you 60 strokes of the cane on that your yellow bald head

ibechris:




This kind economics must be from another planet.
With all due respect to your personality,I think this is what I call economic terrorism.

This is not doable any where in the world. Banks don't print money.

ositadima1:


How Bank Lending Really Creates Money, And Why The Magic Money Tree Is Not Cost Free

How is money created? Some is created by the state, but usually in a financial emergency. For instance, the crash gave rise to quantitative easing – money pumped directly into the economy by the government. The vast majority of money (97%) comes into being when a commercial bank extends a loan. Meanwhile, 27% of bank lending goes to other financial corporations; 50% to mortgages (mainly on existing residential property); 8% to high-cost credit (including overdrafts and credit cards); and just 15% to non-financial corporates, that is, the productive economy.

Money is created on faith alone, whether that is faith in ever-increasing housing prices or any other given investment. This does not mean that creation is risk-free: any government could create too much and spawn hyper-inflation. Any commercial bank could create too much and generate over-indebtedness in the private economy. But it does mean that money has no innate value, it is simply a marker of trust between a lender and a borrower. So it is the ultimate democratic resource.

Money is created when banks lend. The rules of double entry accounting dictate that when banks create a new loan asset, they must also create an equal and opposite liability, in the form of a new demand deposit. This demand deposit, like all other customer deposits, is included in central banks’ measures of broad money. In this sense, therefore, when banks lend they create money.

Nor does the creation of money by commercial banks through lending require any faith other than in the borrower’s ability to repay the loan with interest when it is due.

Commercial banks’ ability to create money is constrained by capital. When a bank creates a new loan, with an associated new deposit, the bank’s balance sheet size increases, and the proportion of the balance sheet that is made up of equity (shareholders’ funds, as opposed to customer deposits, which are debt, not equity) decreases. If the bank lends so much that its equity slice approaches zero – as happened in some banks prior to the financial crisis – even a very small fall in asset prices is enough to render it insolvent. Regulatory capital requirements are intended to ensure that banks never reach such a fragile position.

It is of course possible for banks to lend more than the population can realistically afford.

In contrast, central banks’ ability to create money is constrained by the willingness of their government to back them, and the ability of that government to tax the population. In practice, most central bank money these days is asset-backed, since central banks create new money when they buy assets in open market operations or QE, and when they lend to banks. However, in theory a central bank could literally “spirit money from thin air” without asset purchases or lending to banks.

The ability of the government to tax the population depends on the credibility of the government and the productive capacity of the economy. Hyperinflation can occur when the supply side of the economy collapses, rendering the population unable and/or unwilling to pay taxes. It can also occur when people distrust a government and its central bank so much that they refuse to use the currency that the central bank creates. Distrust can come about because people think the government is corrupt and/or irresponsible, as in Zimbabwe, or because they think that the government is going to fall and the money it creates will become worthless (this is why hyperinflation is common in countries that have lost a war). But nowhere in the genesis of hyperinflation does central bank insolvency feature.

Certainly not commercial banks. People trust the money created by commercial banks firstly because it is exchangeable one-for-one with central bank created money, and secondly because governments guarantee its value up to a limit . Deposit insurance effectively turns the money created by commercial banks into government money.

But even the money created by central banks requires a government guarantee. The dollar is backed by the “full faith and credit of the U.S. government.” And central banks are mandated by governments to maintain the value of the money they create. That’s what their inflation target means.

So, faith in money is, in reality, faith in the government that guarantees it. That in turn requires faith in the future productive capacity of the economy. As the productive capacity of any economy ultimately comes from the work of people, we could therefore say that faith in money is faith in people, both those now on the earth and those who will inhabit it in future.


Culled from Forbes.com

ojesymsym:
I have read/ heard this concept before and suspected that it was what you meant.
However, you used the catch phrase "Print Money" whereas the correct term should probably have been "Create Money".

Munamoqel:
BBN don Finish ? or no BBN Voting rackets this time around No demands for Bus load of fellow Lazyyouths abi ? U are here to troll useless girl .... from Lazy youth to tranq to Osho .=irresponsible Lazy youth !

ositadima1:


The antics of a pompous fellow, the one who thinks he knows it all.

Let me give you a piece of advice, whenever you come across a new or strange idea excessive restraint, take some time and think it through, do some reasearch. Thats how we learn and grow!

Oshokhai69:


Guy stop talking rubbish and learn to grow. Only the Central Bank can print money through a minting subsidiary. This is the practice globally. No commercial bank has the permission to print money. Stop talking out of your smelly asshole and learn from people wey sabi.

I really feel like lashing you 600 strokes of the cane on that your bald head right now

ositadima1:


Comercial Banks "print money" by issuing loans. End of story.

Oshokhai69:
Only an idiot will equate circulation of existing money to printing money.

When banks make loans, they are in essence using deposits that were kept there with existing money by depositors.

When central banks print money, they are adding money to existing money mainly to pay down local currency debt. And this is typically the last resort as it always leads to hyperinflation.

Any mumu that equates them both deserves at least 24 strokes of the cane on their head. And I mean it!

ositadima1:


Most of the money in our economy is created by banks, in the form of bank deposits – the numbers that appear in your account. Banks create new money whenever they make loans. 97% of the money in the economy today exists as bank deposits, whilst just 3% is physical cash.

All the available physical Naira can not go round if everyone decides to hold their moneys in cash. Why?

Oshokhai69:


Oboi you are too dull. No need for me to respond to you again.

ositadima1:


Comercial Banks "print money" by issuing loans. End of story.

ibechris:





One of them creates money by means of loan and deposits while the other prints money by order of the CBN.

Know this and know the difference.

ibechris:





One of them creates money by means of loan and deposits while the other prints money by order of the CBN.

Know this and know the difference.

Frangel:
Money lending banks are intermediaries between depositors and borrowers. The money they lend ("create" comes from deposits or loans they receive (existing money). Cannot print money.

On the other hand, the CBN can just print new money/cash (non existing) and pass it into the system. CBN can also lend money to borrowers.

Very distinct activities.