ZERO EQUILIBRIUM

By Chinedu Okoye  A stable economy is impossible without a strong financial sector and an appropriate monetary environment, these are two prerequisites for a strong monetary foundation, without which output cannot scale and industrial activity cannot expand. It is impossible to separate Banking and other financial institutions from industry. When we talk about strong monetary foundations, we are not referring to absolute Naira strength. We mean exchange rate stability and availability of foreign exchange , without which international transactions (such as the import of essential goods and services or the repatriation of capital) become impossible. What investors, both local and foreign, want is assurance: assurance that policies are credible, and that they can move funds in and out freely. This is only possible with liquid and efficient FX markets and sufficient reserves. The decision to float the Naira came with a sharp devaluation that hit domestic prices. But ...

  Complied by Chinedu Okoye   Mises on Purchasing Power of Money: "The purchasing power of money can be different in different markets at the same time." This he describes as a fallacy for it leaves out the account of a positional factor in the nature of economic goods. It is not permissible he says to "deduce a difference in the purchasing power of money in Germany and in Russia from the fact that the price of wheat is different in these countries" for the commodity in both countries are indeed two different species of goods. This seems yet another self contradictory statement, for if transportation is a production good, then it's safe to say that the purchasing of money with regards wheat in both countries is indeed different for extra cost component involved in bringing it to the intended market. Mises attacks the "connexion" between the assertion that local differences in purchasing power and the widespread belief in...

- By Chinedu Okoye Summary: The financial markets had an interesting week with stocks rising to all time highs in the US NASDAQ and Japan's TOPIX hitting 3.000 for the first time, on favorable earnings report, and lower than expected CPI for Japan. Wall Street has its best week since June with all major US indexes rising. Still Analysts at Investment Banks are calling for a 10% - 15% correction in the stock markets this quarter. Commodities we watch were mixed, with Gold rising and Oil falling on a possible supply glut, and expectedly slow economic activities and growth from tarrifs uncertainties. Punch reported the dicey situation in the composition of [Nigerian] FPIs, citing the net negativeI foreign flows in the equity markets, leaving both the stock market and bond market dependent on hot money. The European Central Bank reported that “Chinese Imports are increasingly becoming an obstacle to ...

By Chinedu Okoye  Capital Importation: Quantity Without Quality? “Nigeria’s capital importation jumps 67% to $5.64 billion in Q1 2025, driven by portfolio investments, compared to $3.4 billion recorded in the same period of 2024.” this represents a 10.82% rise from Q4 2024. @Nairametrics The above seems laudable on the surface, but as usual the devil is in the details. First, the FX flows are concentrated in two forms: Portfolio Investments accounted for 92% of total FX inflows for the period and as it be has for prior periods. The concentration is also in the territorial sources of these funds as 65% of total Inflows originated from Britain. Suggesting that there is need for more sources even as we consolidate finance relations with the Kingdom. Secondly, foreign direct investment contribution to FX inflows stood at $126.29 million with a sharp of 2.24% of Q1 2025. total capital importation in. -@NBS This is an indication that...

By Chinedu Okoye    In the paper New Standards for Economic Data Aim to Sharpen View of Global Economy , , Vladimir Klyuev and James Tebrake discuss a new stated for calculating national accounts by leveraging or employing new technologies.we give a breakdown and make commentary in bracketed  italics.  Said updated system of national accounts, “better captures digitalization, intangible assets, and global production—helping governments support growth, jobs, and investment”, [ by given a more accurate picture of economic activity, which help better inform decisions ] They highlighted that “technology as we know it, smartphones, AI/other intelligence tools etc, did not exist in 2008 “the last time the world’s statistical community overhauled its approach to standardizing how countries measure the economy”.. These new tools referred to as “the global standard for producing measures of economic activity—more fully incorporates emerging technologie...