By Odilim Enwegbara
''The man who controls Britain's money supply controls the British Empire and I control the British money supply. [So] I care not about that puppet placed upon the throne of England '' — Amschel Mayer Rothschild.
Rather than protest against tea tax, ''…the inability of the colonists to issue their own money permanently out of the hands of George III and the international banks was'' as Benjamin Franklin stated ''the prime reason for America's Revolutionary War'' against British. Besides the need for America's own money, the first Treasury Secretary, Alexander Hamilton in 1791 went further to argue, ''Printing our own debt-free money rather than being a curse will always be a national bless….which besides keeping up taxation will spur economic growth."
Financing the US Civil War in 1862, instead of borrowing from the usual European banks, Abraham Lincoln resorting to printing debt-free money instructed Treasury Secretary Salmon Chase to issue about $450 million in dollar currency called ''greenback.'' Angrily reacting as the leader of European banks Amschel Mayer Rothschild sponsored John Wilkes Booth to assassinate him.
With the Federal Reserve System (America's central bank) created in 1913, this power to control the dollar was transferred from treasury secretary to the Fed Chairman (governor). Marriner Eccles in his article in 1932 during the Great Depression argued that ''To get the nation out of this crisis government must flood the economy with surplus money supply.'' This article caught the attention of President Franklin Roosevelt, made him to appoint him his ever-powerful Fed Chairman in 1933.
Making sure he did what he preached, Eccles wasted no time to truly flood the illiquid US economy with unheard-of debt-free dollars. This, not only turned the economy liquid again. It quickly returned millions of Americans to work. This led to the greatest economic boom in America's history.
The principle of stopping economic crisis by printing excess dollars was also adopted in solving the 2008 financial crisis by the Fed Chairman Ben Bernanke, who flooded the illiquid US economy with trillions of newly printed dollars. And it also did the magic of stopping the bleeding as well as turning the dangerously illiquid economy fully liquid again.
Using intrinsically worthless paper money to create wealth and prosperity remains the Chinese invention. Perfected over the centuries, Chinese emperors, using this fiat money not only made their people work hard in order to generate tax revenues for government domestic expenditures and settling of foreign debts, but also allowing citizens keep their surpluses for their well-being. With this well organized economic system, the ancient Chinese prosperity became the envy of every other great empire, including Rome.
Understanding the secret of money supply, besides being world's fastest growing industrial economy, China today is also printing more than half of the world's new money. This, it does in defiance to the IMF's inflation-targeted prudent monetary policy advice to developing economies.
Not only are we almost 100 per cent foreign goods dependent. We're also virtually foreign services dependent, including air travels, construction, health care delivery, overseas education. As Nigerians depend on the dollar for these consumptions, there's tremendous pressure on the naira. This wholesale externalization of Nigerian economy means also the dollarization of the naira. So, to print more naira without already earning its dollar equivalent always puts inflationary pressure on the naira.
But given the high inflationary costs associated with the dollar, naira dollarization makes Nigerians consuming dollar-purchased foreign goods also taxpayers to the US government without citizenship. Appreciating the high inflationary cost of our dollarization naira, one should only image that the dollar, according to US Consumer Price Index (which measures the purchasing power of the dollar over time), has lost so much value, depreciating by 2,554 per cent between 1971 and 2011!
It's these benefits keeping naira chronically dollarized bring to the US that's the main reason Washington does everything to make sure that who else is in charge of the supply of naira is always America's friend. Once stationed, these monetary policymakers and their fiscal policy counterparts are mandated to taking instructions from Washington in a carefully laid down master-servant relationship.
But what have the instructors always demanded? They've always demanded that those in charge of our money supply should only supply enough money to keep government running and to maintain the political class's lifestyles. Nothing more! In fact, restraining money supply remains an important conditionality of IMF whenever it has to lend money any developing country.
Preventing China from being a victim, the Communist Party of China (CPC) has laid down the rule that prohibits non-party members from either being in charge of China's fiscal policy or its monetary policy. And also for the reason that it's only party members that citizens hold responsible for the failure of the economy.
Unfortunately, Nigeria has never been all that lucky. Since independence, care has always been taken by Washington to ensure that it is friends of America that control our money supply. Having our money supply for decades in these kinds of hands cannot have more devastating effects on our economy and security than we're witnessing today. There's no way decades of suppressed money supply shouldn't have rendered the economy more unproductive. There's also no way having millions of productive citizens kept out of work will not result in redundancy with devastating social dislocations. The inactiveness of our citizens also is making government lose huge tax revenues, money needed to provide citizens with essential social services.
But the arrival of Sanusi Lamido Sanusi as Nigeria's chief banker and chief monetary policymaker, the chief supplier of the naira, has since begun to oppose the neoliberal monetarist agenda in Nigeria, who he has refused not only to take instructions from but also to have any impact in determining how Nigeria goes about formulating and executing our monetary policy.
With difficulty having Sanusi take instructions from them, they have resorted to using local friends to frustrate Sanusi's efforts in freeing the naira from its dollarization. And many of such romanticized friends are members of our National Assembly. The recent probing of the near collapse of the capital market seemed another opportunity. But that too heads nowhere as long as Nigerians are ready to oppose its use to rubbish this patriotic agenda.
If our lawmakers reading this are in disagreement, it's in their interest to come out clean! Part of coming out clean is to show to the Nigerian people, that governor who since CBN's creation in 1958 has done more than Sanusi in transforming the country's financial sector, and also done with immense tacit patriotism.
Rather than expending their legislative energy seeking faults in people like Sanusi, our lawmakers should be seeking collaborative efforts with those in charge of our economy, after all if they succeed, also legislators too will take the credit, especially using it in seeking reelection.
If a man means well for his country by both what he says and does, what else should the people do than come to his admiration and praise? If we want to see more revolutionary changes in our financial sector, it's our responsibility to oppose this war against Sanusi by both Western imperialists and their local friends. Good Nigerians, it's time to let our voices be heard as I am trying to do here. That should be our starting point to ensure we reclaim and control our own destiny.
Appreciating his immense efforts in leapfrogging our financial sector will give Sanusi the courage to bring more revolutionary changes to our banking industry as his ongoing cashless policy is no longer catching up with the West but fast beating them in the race they started before us. Let's embrace this cashless policy because it's part of the efforts to free the naira from foreign control, from foreign naira counterfeiters. It will free all of us from dreadful armed robbers who trail us either to our homes or to our offices because we've gone to bank to withdraw some cash.
It's unimaginable in 2009 that by 2012 we Nigerians too could with our computers and smart phones make instant payments, not just around Nigeria but also around the world. Who could have imagined even two years ago that today with our ATM payment-made we could easily drive into a petrol station, insert our ATM cards into the pump machine, fill our tanks, and just drive off?
Thanks to this ambitious policy, the high costs of banking, including corruption and money laundering are today reduced to their barest minimum. With cashless policy, both transaction costs and overhead costs are expected to drop more than 50 per cent by 2014 from their 2012 levels. Also siegnorage, another killer levy CBN imposes on banks to cover its cost of printing, issuing, storing, and maintaining the stock of naira, which banks usually pass to customers too will soon disappear.
Not only having most cash kept outside the banking system brought into the banking system will make banks more liquid. Banks and financial service providers will soon begin to create more money out of thin air as they digitally allocate to one other more credits than they truly have in their vaults, and which they will then go ahead to lend and charge interest on.
Let's not oppose this cashless policy because it will be opposing the next generation of financial intermediations such as e-finance, e-taxation, e-revenue, e-money, e-banking, e-insurance, e-exchange, e-supervision, and e-regulation. Let's not oppose tax collection via automation because that will make us oppose government revenue collection made-easier. Let's not oppose cashless policy because it will temporarily raise cybercrimes since with cashless economy cybercriminals will have no place to hide. We all know that without cashless policy, there's no hope stopping moneybag politics in Nigeria.
Are we not about realizing the much-talked-about niche banking, banking with specialization, banking with unique products and services, banking with second-to-none organizational clarity and objectives, banking that well-aligned strategies and initiatives? Besides reducing operational costs, increasing efficiency and process standardization, and growing revenues and profitability, niche banking also creates enhanced values to bank and customers alike. With niche banking industry-wide financial crisis will have its days numbered, since niche banking makes crisis products and services concentrated.
Before ending this first piece, let me use this unique opportunity to thank the Editor-in-Chief, Mr. Nduka Obeigbena for another opportunity to write for Thisday. As well as trying to be fair, I will defiantly root the truth wherever it is hidden.