Note that Erdogan has been alternatively threatening Israel, Greece, Cyprus, Georgia, and now Syria in the last 9 months as he is flailing about trying to deflect the internal troubles in Turkey.
The private economy of Turkey is really screwed up. All growth in last 6 years was in non-durable goods, the imbalance of too many imports, no prospects of balancing the economic activity by exporting durable goods, and a labor base where 75% of the population only has a 8th grade education.
This uneducated populace is Erdogan’s political base, and they are getting hit the hardest as the bubble bursts. The educated metropolitan population that is much more classically liberal and secular (and Erdogan’s politlca opposition) are doing quite well as the cost of labor is falling and the rentier classes are unaffected by intra-Lira interest and rent wealth transfers.
Moody’s raised the rating of Turkey’s Federal debt because the debt is denominated in depreciating Lira.
The Central Bank of Turkey is dropping Lira from Helicopters right now to try to build inflation in a country where 70%+ of the population can not keep up with the bubble’s inflation rate.
http://www.meforum.org/3134/turkey-economic-miracle
Excellent post!
1. Claim: Turkey's currency is devalued.
FACT: The Turkish Lira has increased in value relative to the Euro over the last year, which is the important metric as the Euro Zone is by far Turkey's largest trading partner.
2. Claim: Turkey's credit rating is only increasing because the value of the Lira is decreasing.
FACT: Aside from the fact that the Lira isn't dropping relative to the Euro, this makes no sense. Have you ever heard of a credit rating being increased because the value of the currency is falling? I haven't.
3. Claim: You claim that Turkey is "threatening Israel, Greece, Cyprus, Georgia and now Syria."
FACT: Now I didn't really want to get down in the weeds on this, as I'm certainly not Turkish, not Muslim and don't generally agree with Erdogan on a whole lot, least of all his foreign policy, but this is ludicrous. Unless your definition of "threaten" is a heck of a lot different from the Merriam Webster definition, I have no idea what you're talking about.