OPEN LETTER: Osazua IVBAZE writes CBN Governor, Emefiele On Money printing

Mr CBN Governor Sir, I know you have loaded experience on monetary issues and the economic ramifications of money creation. As head of the Nation’s Apex Bank you certainly must have worked hard enough to be where you are today.

I also appreciate your dilemma, especially in a nation like ours where , sometimes, you are compelled to compromise professionalism in the face of political pressures. Striking a balance between economic truth and political lie can really be a grueling and agonizing experience. I know in your privacy, that you acknowledge the default in your claim that printing money is like lending.

The much I know is that money printing to raise revenue for financing the budget deficit which causes inflation , is like an inflation tax. This is because the government is able to get resources through printed money which causes inflation and reduces the real value of the holdings of money by the public

Unless there is an increase in economic activity commensurate with the amount of money that is created, printing money to pay off the debt would make inflation worse. .This would be, as the saying goes, “too much money chasing too few goods.”holdings of money by the public.

Printing more money doesn’t increase economic output – it only increases the amount of cash circulating in the economy. If more money is printed, consumers are able to demand more goods, but if firms have still the same amount of goods, they will respond by putting up prices.

Money Printing Debases Currency, Causes Inflation, and Reduces Your Wealth. Basic economics clearly shows that the increase of any money supply causes inflation and reduces purchasing power. The reason for this is because a spike in demand exceeds supply causing the prices for everything to jump higher.

CBN Governor Sir, you might be provoked to refer me to the United States , which sometimes prints money,

Be reminded that the U.S. dollar is the global reserve currency. In other words, most countries and companies from other countries usually need to transact business in U.S. dollars, making them exposed to the value of their currency relative to U.S.

Additionally US prints money (or actually creates it digitally) and then uses that money to buy bonds. The idea behind putting money into the economy was to drive down interest rates and hope that people and businesses borrow and spend more, and in the process revive the American economy.

That is not the scenario here.