Skip to comments.Turkey’s Currency Meltdown
Posted on 05/24/2018 12:14:14 PM PDT by BeauBo
click here to read article
What’s your point? (re: Adam Smith)
“Whats your point? (re: Adam Smith)”
“What do Assad, Kim, Mugabe, Chavez and Castro have in common?”
Many things. What is your point?
You have given me a completely different perspective to consider, and I really thank you for that.
Too bad deficit spending hasn’t led to _serious_ political changes in US. We continue to spend money-from-thin-air, to infinity...
GO TRUMP GO
Iran's President Hassan Rouhani, Russia's Vladimir Putin and Turkey's Tayyip Erdogan meet in Sochi, Russia November 22, 2017. (photo credit: SPUTNIK/MIKHAIL METZEL/KREMLIN VIA REUTERS)
The Three Amigos
Giving the Panama Canal to Panama did wonders for that country’s people and economy. Panama is now a stable, prosperous nation that’s moved past the days when a dictator like Noriega could hold power.
So maybe Jimmy wasn’t exactly making the best choice for the USA by letting the canal go, the result has been a stable nation that we don’t need to intervene in like we did in the 1980’s.
Panama was long a stable prosperous nation before Noriega arose. He was a violent anomaly in Panamanian politics, that the Panamanians were not prepared to deal with.
Getting rid of Noriega was what made Panama a free, prosperous and politically stable country (albeit still with its characteristic high crime rate).
Giving them the canal, resulted in them quickly taking a contract from the Chinese to run it. Panama gets a decent revenue, the canal keeps operating, and China has control.
Unfortunately the pendulum has swung in the wrong direction for Turkey and is not likely to swing back. As muslims become more moderate, they tend to have less kids whereas the more devout and extreme muslims have a higher birth rate. Mark Steyn did a good show on this a few months back and explained why the secular state of Turkey has been overthrown by islamist Erdogan.
“Erdogan Is Failing Economics 101” (Foreign Policy magazine)
[Interest is the mother of all evil. Erdogan has repeatedly said he believes that high interest rates cause inflation, flying in the face of the economic rule that tightening the monetary supply reduces inflation. Some of his defenders say that his idea is rooted in the economist Irving Fisher, who held that a country could pull itself out of deflation by raising interest rates. Erdogan has been railing against the interest rate lobby since the beginning of his career, and financiers for a while gave him a pass as a politician cushioning the side effects of economic reality. Now, its apparent that Erdogans hostility toward interest is more philosophical, based in Islamic and Christian views of usury as sinful. Whats more, his vocal opposition to the wishes of his own Central Bank governors has worried investors about the independence of that institution.
Many foreign investors over the years thought that Erdogans views of high interest rates was a standard politicians criticism of rates, says Inan Demir, an economist at Nomura, a Japanese financial holding firm. But more recently, especially after Erdogans most recent statements in front of foreign investors in London, most people think its different, and its more deep-rooted in his belief system.]
It’s said of Nicolas Cage that his acting style can be encapsulated in the phrase “more is more”. In other words, exaggerated emotionality is his trademark. The same could be said of Erdogan. He never just says something. It’s got to be in block letters, highlighted in neon orange.
Stereotypically, Turks are exuberantly outgoing. Kind of the National character. Nationalism, strongly racial or ethnic in nature, is also a pronounced element of their society.
As a gifted politician Erdogan reflects those things that are popular. Shifting his earlier (apparently tactical) support for Kurdish minority rights to harsh repression of Kurds at home, and aggression over the border, has brought him a degree of acceptance from many military officers, and allowed him to play on racial animosity in the mainstream Turkish population. There has been an increase in racial categorization imposed, with “Turkishness” increasingly required for Government jobs and benefits - especially since the coup attempt.
Erdogan’s natural political base though, has always been among islamic religious conservatives. Interest is the mother of all evil., reflects a primary tenet of Sharia in public policy. The charging of interest is completely forbidden in the strict school of islam that he promotes (the Hanbali Fiqh - like the Saudis, Hanafi was the Ottoman Fiqh). That is why Gulf Arab countries have long sought to create and sustain “islamic banks” which try to work around normal interest practices, calling interest fees, or consuming large state subsidies.
In practice, trying to implement an actual no-interest economic policy would be a titanic drag on Turkish economy - almost on par with wholesale expropriation/nationalization. Turkey does not have a flood of excess oil revenue to waste on such a lark.
and, Turkey has no Overseas Chinese
Very interesting point. +1!
The bottom line of the article is in the brief extract.
The long run up in the Turkish economy that buoyed Erdogan’s political rise, seems to be reversing. Wednesday was a big jolt to their system - interest rates jumped from 13.5 % to 16.5%, and the currency dropped 5% in one day. The lira is down 15% for the month of May.
The party is over.
Erdogan’s increasing authoritarian control has made it a much less safe place to invest. Capital flight and brain drain are now significant flows.
On the 14th of May, he made statements (to foreign financial folks) to the effect that he would take more control over the Central Bank. That seems to have started a rush for the exits.
Erdogan has been printing excess money and increasingly deficit spending, as he has centralized power. Presumably, he is now skimming a larger percent as well, because he has always been notably corrupt. The economic checks and balances instituted in 2000-2004, to make Turkey more compatible with the EU (responsible for much of Turkey’s big upswing), have been significantly reversed, especially since the 2016 coup attempt.
Turkey is quickly reverting to a despotic, corrupt economic model.
In a nutshell!
Islamic nutbqlls who are marxists will do that to ya
Islam and Marxism are intertwined
They’re both COERCIVE
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.