I don dey think this things but the fear of appearing like olodo no make me talk

But what if the printed money is used to pay back our loan instead of it being circulated which will result to inflation like you people said

read about the Yugoslavian dinar from 1993 and would understand everything that needs to be known about printing money for the sake of it

kcowen:
I don dey think this things but the fear of appearing like olodo no make me talk

But what if the printed money is used to pay back our loan instead of it being circulated which will result to inflation like you people said

u can't pay Back in naira, so you'll have to convert to dollars.
at the end of the day you are sending away dollars that is needed for a worthless currency.
that money will never leave Nigeria, so at the end it'll still cause inflation as there'll be excess in circulation compared.
remember it's also the scarcity of money that gives it value

kcowen:
I don dey think this things but the fear of appearing like olodo no make me talk

But what if the printed money is used to pay back our loan instead of it being circulated which will result to inflation like you people said

Igbo man with too much sense

First it is important to know how money works. It is also important to know how economy works. The size of an economy determines the degree of freedom the country has to print extra notes. Value is increased by scarcity. If you can easily pick up diamonds, then it looses its value. The more readily acceptable a currency is globally, the stronger the currency and hence the less damage when there is extra printing of that currency. For instance, if America decides to print extra 50 billion dollars, lower and middle income countries suffer because they will be the ones to cussion the effect of extra money in circulation globally. What this means is that there will be capital flight. This means that more people will have the capacity to purchase, and this in-turn means that a large number of people are looking for the same product in the global market. What manufactures would do is to increase the prices of their products to selectively kill the demand. It means that a product which usually goes for $100 will become $110 dollars and this has effectively terminated all customers whose budget falls within the $100 mark. This is what is called INFLATION.
It is important to note that for third world countries such as ours, the central bank views your money domiciled in the local banks with the lense of a dollar. This means that if you have #100,000 in your zenith bank account, you just have $200 domiciled with the central bank.
So printing more money locally leads to more money in the hands of the populace and therefore more purchasing power. Demand therefore outweighs supply and the only way of making the economy work is for prices to go up thereby limiting the number of people who are able to make purchase and this is INFLATION.

Skyfornia:
Not satisfied with all the answers...why is this hard to explain? Where are the economists?? Please come and educate us like we are kids.

Just like the OP asked...if Nigerian government decides to print money to execute some projects like railway, 2nd niger bridge etc instead of borrowing money from another country ..how would that cause inflation??

Note: Whether the amount is borrowed or printed...it will still get into people's hands. So why saying there will be too much circulation of money?? Is the borrowed money when used, not going to circulate??

the reason is that the government controls the central bank and the foreign reserve.

Goods and services which a country cannot produce will have to be purchased with foreign currency such as dollar, etc.
You cannot used your country currency to buy goods directly from other country.

The government who control cash inflow have to have some reasonable amount in its foreign reserve so her citizens can purchase dollars at some rate before they can import foreign goods.
You see...as Nigeria imports virtually everything, we needs our resources to be sold to other country to acquire the dollars which will be in turn sold to our citizens...

Our printed currency can only acquire local made products.

Gold gold standard is the best

oz4real83:
Do u still remember what they taught u in school as one of the characteristics of money that "it must be relatively scarce"?. If u keep on printing money, it becomes so common and loses that basic characteristic of money. That is why inflation is also defined as too much money in circulation but little purchasing power"

money in Nigeria is hyper scarce.
we need to print much more to make it relatively scarce..

Idamond:
Why does a country who prints her own money still borrows from other countries. economists in the house please help.?

Printing more money is never the best solution because you will create a super inflation in the process, a situation where too much money will chasing a few commodity produced.

fernandoc:
School na scam, school na scam! Now look at the kind of useless question a full grown man is asking.

You wey come go school no come dey educated to know say person no suppose know everything. No be school talk say 'an educated man is a man who knows nearly everything'? Nearly everything no be everything. Ogbeni park well.

Idamond:
Why does a country who prints her own money still borrows from other countries. economists in the house please help.?

This question again....read more about inflation

Money doesn't have intrinsic value...it's like a cheque.

If you print more money you get inflation and even hyperinflation...

The German government printed so much money to pay for stuff during WWI and it resulted in hyperinflation.

The price of a loaf of bread went from half a Mark to 200 million Marks!

See how useless the money became...


- A woman burning money in a stove because it's cheaper than wood:




- Kids playing with bundles of cash on the street:




- Money being used for arts and crafts:




- Using money as wallpaper...because it's cheaper than wallpaper:




Source

It's all about value and not printing more money

fernandoc:
School na scam, school na scam! Now look at the kind of useless question a full grown man is asking.

Mr Sabinatu, na you be the island of knowledge ba? Stop being clever by half!

Now his ignorance/doubt about this particular subject is cleared to some extent.

fernandoc:
School na scam, school na scam! Now look at the kind of useless question a full grown man is asking.

it looks useless to u Bec you're useless.

providencia:

This isnt necessary. Op is asking a harmless question.

Oga this question has become a recurring question on Nairaland. I can't remember how many times I get to answer this. here is another thread we did justice to this exact question

https://www.nairaland.com/6310798/why-cant-federal-government-print

so is it that our standard of education is falling or what?

gaddafe:


Oga this question has become a recurring question on Nairaland. I can't remember how many times I get to answer this. here is another thread we did justice to this exact question

https://www.nairaland.com/6310798/why-cant-federal-government-print

so is it that our standard of education is falling or what?

This question is really stupid tbh

when a country source for loan outside her shore, what she will get is credit facilities worth of the loan she sourced for not cash. These credit facilities could be in term of raw materials, service, machineries and so on. With this, excess money in circulation will be put in control. Also, no country in the world except US will like to move dollars in her shore to other nations in the name of loan.

Hello ladies and Gentlemen,this has been a tortoise in the country and definitely questions would never exits without the right answers......


Let's take it that okay we now control inflation of money by considering limiting the often use of money and printing of money ,then what says about those who earns in salaries , because mostly we all do not know anything in this world and we live by belief..... Truly speaking...

Now look at the economy ,is this how inflation is controlled....let's take for instance a loaf of bread is been sold at 500naira without any constant price and everyday the price rise without increase in salaries too.....Money should never be a problem in the economy......As a president there are many religions and many languages in the country and this will only take plans to solve it...

Imagine we never accepted the white rule over many things that could have helped us achieve what we have and what we can. Money was not created with us at the beginning and look at the damages it has resolved to in the very century.....The world was to be at peace at every given situation and not condemn each other because of power and unnecessary things attached to it.

Everyone wants money and to live that luxury life yes we know all this ,but there is all room for that despite that it is been control not with inflation nor deflation but by using the necessary equipments we have to solve our problems...


Example of what I'm saying is that of satisfaction in needs.there should be higher payments in salaries and a defined loans to all citizens of Nigeria been it Horuba,hausa or Igbo with other given religion too.


This is the key but it needs the actual people up there to keep constant of thier works.. Nigeria we have enough of what we want but corruption and greediness won't allow us to see clear of what and where we are going......

Thanks everyone.

Idamond:
Why does a country who prints her own money still borrows from other countries. economists in the house please help.?

PRINTING VS BORROWING: WHY NOT?
Afterall, currency na just pieces of paper!

This is the reason that ordinary citizens, during times of crisis, always wonder why government doesn't simply print more currency.

Economists, however, have always warned against the impulse to print more money.

If government creates too much money, people suddenly end up with a lot more in their hands; Consumers then suddenly demand more goods/ services, whereas supply would be unable to meet the sudden sharp rise in demand.

This sudden higher demand thus pushes prices up, which (in the worst-case scenario) results in hyperinflation.

FOR INSTANCE:
In Zimbabwe in year 2008 alone, inflation increased to 231,000,000% because the government attempted to solve the country's crisis by printing paper money.

A sweet which previously cost 1 Zimbabwean dollar became 231 million Zimbabwean dollars a year later!

By April 2009, Zimbabwe had to stop printing its currency and started using currencies from other countries.

ILLUSTRATIONS
A. The first photo below shows Zimbabwean banknotes ranging from 10 dollars to 100 billion dollars that were printed within a one-year period (the magnitude of the currency scalars indicates the extent of the hyperinflation).

B. The chart below the photo shows Zimbabwe's year 2007 inflation of almost 25,000%.

Where Can I get WAEC, NABTEB and NECO Scratch Card Online?

https://tremen.ng/