Engineermbugame:
Hmmm,i learn alot here.dis thread is educated.

jjy:
What primary class are you?

Please Seun should put age limit to registration on nairaland as 13 years and above like Facebook.

fiizznation:
The simple answer is inflation. The currency notes that we use don't have any intrinsic value, rather the have exchange value. Which means 50naira doesn't mean its value is 50naira but you can exchange it for goods and services. A country like Zimbabwe couldn't understand this simple economics and they went ahead to produce more and more currencies, at the end what still happened? Well even a pen ended up costing thousands of Zimbabwe dollars and a bread was sold for as high as $2million{Zimbabwe dollars}. Their inflation rate rise to about 80 billion percent. Funny.

And everybody in Zimbabwe instantly became a billionaire{ poor billionaires}

Serenity008:


You are as clueless as your name. Someone asked an intelligent questions u are here spewing dust.

I bet you don't even know the answer

ayguru:
Bro, how will you explain the exchange rate of one naira equals to 1.8 Zimbabwean dollars?

ayguru:
Bro, how will you explain the exchange rate of one naira equals to 1.8 Zimbabwean dollars?

bookface:


You are missing the point. My explanation is that yes, printing money to make every Nigeria a billionaire will cause hyperinflation....but printing money will not always equal inflation. Two different things.

mrvitalis:

What if the money is printed and given to people as loan to start up production of things heat can be exported??

Truth234:


It was officially abandoned since 2009 and demonetized in 2015. So it is not a legal tender any more, that website needs to update its system.

bookface:


Printing money will not always result in inflation. Although it is the conventional wisdom, it is not always the case.

The conventional wisdom is based on the simple equation MV = PY where M is the supply of money, V is the velocity of money, P is prices and Y is the total quantity of goods.

The conventional wisdom that printing money simply increases inflation assumes that if M is increased, all other things being constant, then P should increase.

But all other things shouldn't have to be constant. For example, if printing money leads to more quantity of goods, prices could actually fall.

Furthermore, the argument is nonsense that more money supply equals higher inflation. Everyday a bank creates a loan, it is basically increasing the money supply out of thin air, which may not necessarily lead to inflation.

Finally, think about this...suppose the central bank prints out 10 billion naira notes today, and they leave it in the vault...would it cause inflation?

The answer is no

[/b]Suppose, the CBN choose to give the 10 billion notes to just 10 people, would this cause inflation? The answer is no! hence the role of the velocity of money[b].

EDIT: That said, you are correct, printing money to make all Nigerians billionaires will result in hyperinflation.

Davinex:
Inflation will be oqn the rise and the currency will lose it value.

fiizznation:
Which is not Zimbabwe legal tender any more, the Zimbabwe dollars or what? I don't get

Truth234:


Zimbabwe now use the US dollar, South Africa Rand, Bostwana Pula, Pound, Aussie Dollar, Japanese Yen and the new one is the Chinese Yuan. There is nothing like Zimbabwe dollar again, people just like to talk about it because of the negativity it generated to mock Mugabe.

oglalasioux:


Will you buy the raw materials for production with your naira or with the supplier's money? That's the trick. Government uses local money to distribute goods and services. In Nigeria 90% of everything is imported. We can't buy in naira but dollars. When it gets here we buy in naira which government has to source for dollars to import more.

So, if Nigeria prints money and distributes to everyone, two much naira will be chasing too few goods and the economy will collapse due to inflation. Government therefore rations goods and services by printing fewer naira.

basingstoke:
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

scully95:
Where is missy89 (olodo of the 21st century) that said a country can just be printing money anyhow ?

When you back the anglozionist empire blindly, this is what happens. The U.S has been priting money and nothing is backing the money except war with less armed countries. At least war is backing it and what does it do. Regime change in countries that go against dollar. Well, Russia is finally setting up a final answer to all the regime changes.. So nothing will be backing the dieing Fiat dollar.

Dollar can only survive in a one world order which CHina and Russia is Challenging and will eventually win. All the systems using dollar will default with the U.S dollar. Nigeria needs to change the petro-dollar on time before it's too late.

The anglozionist empire is going down and petro-dollar is also going down.

mrvitalis:

There are goods we can export that we can produce 100% with local raw material

Consider the case of the United States. Let’s suppose the United States decides to increase the money supply by mailing every man, woman, and child an envelope full of money. What would people do with that money? Some of that money will be saved, some might go toward paying off debt like mortgages and credit cards, but most of it will be spent. I know the first thing I’d do is go down to Walmart and buy an Xbox or PlayStation 2 (if you have an opinion of which I should buy e-mail me by using the feedback form).

I’m not going to be the only one who runs out to buy an Xbox. This presents a problem for Walmart. Do they keep their prices the same and not have enough Xboxes to sell to everyone who wants one, or do they raise their prices?

The obvious decision would be to raise their prices. If Walmart (along with everyone else) decides to raise their prices right away, we would have massive inflation, and our money is now devalued. Since we’re trying to argue this won’t happen, we’ll suppose that Walmart and the other retailers don’t increase the price of Xboxes. For the price of Xboxes to hold steady, the supply of Xboxes will have to meet this added demand. If there are shortages, certainly the price will rise, as consumers who are denied an Xbox will offer to pay a price well in excess of what Walmart was formerly charging.

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 money supply was 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 change the quantity of goods.

In the days of Idi Amin, Uganda took the risk of printing new money to bail that country’s economy out of the doldrums. The exercise backfired so catastrophically, it has taken Museveni over two decades to right the disastrous consequences.

Robert Mugabe’s Zimbabwe is still stewing in the fire of economic wreckage which was exacerbated by the decision of that country’s Central Bank to print new money for the economy to bounce back. Each time Zimbabwe printed new money, the country’s currency drops in value. Today the Zimbabwean dollar can buy nothing anywhere in the world except in bales of the currency to buy a hamburger.
- See more at: http://www.vanguardngr.com/2009/09/printing-more-money-can-backfire/#sthash.OLmeLTW5.dpuf

Everyone in Zimbabwe during its hyperinflation were under severe pressure unlike anything they had ever experienced. The government had increasingly turned to rampant money printing as a funding alternative and as this newly printed money made its way into the markets prices began to rapidly rise.

As inflation skyrocketed, it placed unique pressures on businesses – revenue that companies made couldn’t compensate for the cost of restocking more expensive supplies later. This margin pressure is common in high inflation environments: the net result was that businesses began to close down. By 2006, all stores had emptied. Prices hurtled higher due to an even greater scarcity of goods and society morphed into a barter economy.

oglalasioux:


Your idea is good but can't work in reality. What is the money you spend everyday? It's just a promissory note. It means you are promising to pay because the value of the paper money is at the Central Bank in gold. The Central Bank can only print money worth the gold it has. What if we all demand our naira worth of gold (the real money) and the central bank actually has less than what is in circulation? That's exactly what happened to USA during the Bush administration.

The USA actually has more paper money than the gold at Fort Knox. China (which supposedly owns much of the gold) decided to keep quiet because it would have practically been the end of the world.

Research more about money and you'll be the first to panic if government wants to distribute money to everyone without the goods and services to back it up.

theEYe21:
See this olodo!

Missy89:



Sorry i dont have time for you stup1dity this month. Still waiting for you to name one country that is backing their printed money up with something. Will you ever answer the question?

scully95:


i have answered your f00lish question several times. i don't have time to copy and paste it again. This crook is still even saying the same thing.. lobatan..

Any country can just be printing money anyhow without anything back it ?? olodo of the 21st century ni e se.

you are too low honestly and it's the reason i will continue to counter you anglozionist, mere toilet paid troll set out to distaught public opinion particularly on NL.

He's here still saying the same thing that any country can just be priting money any how.

Chai..