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Nairaland Forum / Nairaland / General / Business / Why Can't A Country Just Keep Printing Money And Become Rich (50984 Views)
How Can A Person Living In Nigeria Become Rich? / Nigeria’s CBN Is Printing Money To Keep The Govt Afloat & Alarms Are Ringing. / Answer To: Why Can't A Country Keep On Printing Money And Become Rich (2) (3) (4)
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Re: Why Can't A Country Just Keep Printing Money And Become Rich by micolaj: 2:33pm On Jun 01, 2016 |
sukkot:Exceptional lie. GOVERNMENT BONDS are LOW RISK INVESTMENT because a country can print to pay at maturity.There is no cap on volume of currency that the Central Bank of a country can print. Exception occurs only when a country belongs to regional economic union like that of EU, which means the union is using UMBRELLA CURRENCY(EURO). Which means members cannot print money at her own will because it's going affect the general value of the currency. For example, Greece is using EURO.The reason why she cannot pay creditors is because she cannot print at own will. |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Nobody: 2:34pm On Jun 01, 2016 |
suyamasta:As Nigeria decides to print more money for productive ventures, workers building these ventures are paid salaries, and workers employed to work as staffs are also paid, at the end of the day: they will save some, buy basic necessities with some, and invest some. It still increase the volume of money in circulation. #myopinion and stand to be corrected. |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Truth234(m): 2:38pm On Jun 01, 2016 |
Puresolutions: I am responding because you are the only person that know its very possible in modern economics, but there are a lot of proof my friend. Currently, US, UK, Japan and the entire European Union are printing money to stimulate the economy, it is a modern economics model called Quantitative easing (QE). In fact, US started with $40 billion a month in 2012 and later increase it to $80 billion, that is the reason why they were able to recover from recession faster. UK and Japan are currently doing the same, while the EU introduced a LTRO (long term refinancing operation), a model that allow people to borrow money with zero interest. European Central bank (ECB) print, give to the people to invest in the economy which allow them to create jobs and pay taxes to the government, without having to pay any interest on the money, only the principal is returned. Mind you all these countries are struggling with deflation right now, I mean they can't even get their inflation to just 2 percent target. That is how effective QE is. QE is different from just printing money endlessly, but it follows a unique pattern which allows the central bank to buy financial assets from commercial banks, in Nigeria it will be treasury/bond, hence raising the prices of those and lowering their yield-return (inflation control). Also, Nigeria Central Bank can stimulate the economy by printing money to create new jobs and generate more revenue from taxes with reduced interest rates, I am talking about 5 to 10 percent not the current 30 percent. Friends, it is very possible as you can see. Most of our leader's models are outdated whereas economics is like your car, there is always a new working model. Japan and the EU just started negative deposit rate, watching to see how that turn-out. Georgry 5 Likes 2 Shares |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by kizyalex10(m): 2:40pm On Jun 01, 2016 |
Printing money comes @ a loss.to print 50 naira might come @ a cost of 500 or 300 naira.for example |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Nobody: 2:41pm On Jun 01, 2016 |
Money is true sense is anything backed by value, the only reason paper money (currency) is valuable is because it is backed by a sovereign government, who can promise to fulfil obligations, that us why when a country is at war, people don't hold the currency they instead buy keep lands, properties , Gold etc. . Printing more money does not translate into value, B if there are 10million naira that can only but N10million worth of food. If you print an extra N10million , while food(and other valuables ) remain the same what you have is people buying the same food for twice the price. The currency looses value, in the same vain, once you have more values e.g food, and same amount of money , the currency strnethens. Abi na money we go chop, once everybody has money ,who goes to farm, your driver has same money as you, so, for you to hire his services you must pay more than he earns. 1 Like |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by suyamasta(m): 2:42pm On Jun 01, 2016 |
Atk1nson:Yes na so! |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by 1God: 2:44pm On Jun 01, 2016 |
They should produce it in excess for social amenity like good roads , stable power supply etc. 2 Likes |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by okedoyinolabisi(f): 2:49pm On Jun 01, 2016 |
Hisduchess:to be candid op, I've always nursed this thought. I didn't av a clear understanding. I also disliked economics. I still don't like it dat well. |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by suyamasta(m): 2:49pm On Jun 01, 2016 |
herbie27:Yes thats why we have the CBN they can mop up excess money and destroy that money using different economic instruments, The most important thing here is that money would have exchanged hands and people would have been lifted out of poverty, and productivity would be increased! 1 Like |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Riderboy(m): 2:49pm On Jun 01, 2016 |
PentiumPro: Nobody is an island of knowledge. There is no need for the insult. 2 Likes |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by suyamasta(m): 3:00pm On Jun 01, 2016 |
kizyalex10:No thats not true please except you are printing outside your country! see how much it cost the US to print the dollar $1 and $2 --- 5.5 cents per note $5 --- 10.9 cents per note $10 --- 9.9 cents per note $20 and $50 --- 10.6 cents per note $100 --- 14.3 cents per note Source: https://www.federalreserve.gov/faqs/currency_12771.htm https://www.nairaland.com/3027710/see-how-much-it-cost 1 Like |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Nobody: 3:03pm On Jun 01, 2016 |
tsdarkside:That's why the US dollar has rapidly lost it's value and purchasing power over the last few years. The Federal Reserve has engaged in "quantitative easing" which they believe would stimulate the US economy, but has in fact, resulted in inflation. 1 Like |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Hisduchess(f): 3:06pm On Jun 01, 2016 |
fiizznation: thanks plenty for explaining to me cos I have kinda tried using internet to solve this puzzle buh I still gets more confused. wish u am seeing u life now so that I can get well cleared about this topic.buh thanks for ur help so far I appreciate 1 Like |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Truth234(m): 3:09pm On Jun 01, 2016 |
CFCman: No, that is why the US dollar is the most appreciated currency in the world for the past three years. It is hard to explain all these if you are not in finance/economics. 2 Likes |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Dharnchuks(m): 3:09pm On Jun 01, 2016 |
Imagine if minimum wage was N1m. You won't expect to see coke selling for N60. We might not even have N500 notes again. * Point is more money and less goods= inflation. |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Nusaf: 3:15pm On Jun 01, 2016 |
I have asked similar question in the past but did not get satisfactory response. Even now, all the comments I have read so far are not technically convincing. Pls Economists in the house, I need response from the economic point of view. |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Nobody: 3:15pm On Jun 01, 2016 |
theEYe21:Ok genius,can you pls explain why to him? |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by wacoj(m): 3:18pm On Jun 01, 2016 |
Did this poster do any form of Economics at all? I know very well that we were taught INFLATION in secondary school and its causes. We were also taught everything about the law of demand and supply, GDP, ECONOMIC GROWTH, PRODUCTION, bilateral trade etc Now if anyone who attended a secondary school is asking this question, I think ur school fees was a total waste. Secondly, since you have access to the internet, why can't you make use of ''google'' to educate yourself more free of charge! Chaiiii.. 2 Likes |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Pheals(f): 3:19pm On Jun 01, 2016 |
Caseless:bro u are right .... U can't compare that time to now : he left it @60naira u ar right but u forgot that dollar was not stagnant also or u think u.s.a ain't moving forward ! The u.s of today is not of yesterday ... But have u ever read articles about abacha? If no ! U won the argument thanks |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by dmltoyin(m): 3:26pm On Jun 01, 2016 |
PentiumPro:ITK. You are a guru in all subjects ba |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by wacoj(m): 3:27pm On Jun 01, 2016 |
Nusaf: The ans is very simple! Let me explain to you like a Primary 1 pupil. I believe you must have heard about the word INFLATION. A country is said to be experiencing INFLATION when the value of its currency is very weak. Thereby making it so useless that a big amount of money will only get something small. For instance Imagine you buying a loaf of bread for 20k, enter transport from Obalande to CMS 30K Now this thing called INFLATION happens when you have too much money in circulation chasing few goods. In order words, when you prints so much money without external earning through export you are invariably inviting INFLATION. It is not what any country should pray for. incase you need more explanation do let me know. THANK ME LATER |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by basingstoke: 3:27pm On Jun 01, 2016 |
Because the cost of Printing quality money is more than the money itself. However, too much money withOUT goods and services leads to inflation, Zimbabwe is an example 2 Likes 1 Share |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Nobody: 3:36pm On Jun 01, 2016 |
Nusaf: True,most responses thus far are not explicit and explanatory enough. I will write a comprehensive article on this issue soon. And as much as possible,make it clear to a layman. There's nothing bad in printing more money,but alot of things cld go wrong. I will explain everything. |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by igala1(m): 3:41pm On Jun 01, 2016 |
If CBN prints billions of naira and share to Nigerians. What would we like to do? Spend. Invest etc. If we invest in say, building a refinery or purchase a vessel. I'd need to buy parts from oversea since I don't have the technical/material resources. Then let's say N300=$1. What would happen? I'd return back to CBN or BDC(Aboki) to convert my say billions to dollars at the prevailing rate. Now the more Nigerians have the printed billions, the more the BDC would charge for a dollar I.e N1000=$1. That's because a lot of people are in need of the dollars, the dollar becomes scare and Aboki would jackup the exchange rate so he can have more naira for his scare dollar. This would happen until there is no more dollar available to Nigerians. Then we won't be able to invest& spend to buy especially foreign goods/assets. We'd only be able to trade locally until local goods too becomes scare and we'd have our billion naira but won't be able to buy anything with it. The only solution is that we're able to increase our productivity and sell both locally and export to get more dollars into the economy. Once that is done we'd have excess dollars to satisfy our printed billions. US could afford to print & bailout because it has what we call trade surplus. I.e sales from exported goods/services>spendings on imported goods/services. That is they produce more than what they consume. Hope this simply clarify your question. 1 Like |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by suyamasta(m): 3:41pm On Jun 01, 2016 |
basingstoke:Not true! |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Nobody: 3:46pm On Jun 01, 2016 |
Why you call money, that is "paper money" is not actually money. Actual money is the resources a country has or the potential ability of the country to make money and attract money (investment). If the "paper money" were to be made in excess to a country's actual wealth, it results to a false economy. The price for commodities will shoot up without increase in value. Too many people will want too many things at the same time because they can afford it. Market will try balance demand and supply by increasing price, not out of greediness but out of inability to meet demands. so, that is a very bad idea |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by girl4rmspace(f): 3:47pm On Jun 01, 2016 |
theEYe21: you shouldnt call him an olodo just because you know better. That's rude. Am sure there are things he knows that you dont know. It goes both ways 2 Likes |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by emmanuelbrown26: 3:47pm On Jun 01, 2016 |
Trendy247:. Guy u are very very funny |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by planetx: 3:55pm On Jun 01, 2016 |
sukkot:Did you read this trash on some conspiracy theories website? 1 Like |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by Nobody: 3:56pm On Jun 01, 2016 |
See what looting is causing |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by MURITADOM1(m): 3:56pm On Jun 01, 2016 |
Georgry: YOU NEED MONEY TO PRINT MONEY. |
Re: Why Can't A Country Just Keep Printing Money And Become Rich by basingstoke: 3:58pm On Jun 01, 2016 |
suyamasta:Because the cost of Printing quality money is more than the money itself. However, too much money WITHOUT goods and services leads to inflation, Zimbabwe is an example |
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