Posted on 04/25/2021 5:33:49 PM PDT by RomanSoldier19
In Turkey, the coronavirus pandemic weighs on an already ailing economy. The Turkish lira plunged to almost record-levels after President Erdogan fired his third central-bank chief in two years … to install a like-minded critic of high interest rates. A rate decision is due today.
Restaurant manager Rengin Atac is at his wits end. The lockdown forced him to shut his business with its 15 employees for months, and now into Ramadan as well – because of rising coronavirus infection numbers. To make matters worse, inflation is running at a rate of 16 percent per month.
A lot of Turks have lost faith in their economy. Many are unemployed and can barely afford anything. As the lira’s value plummets, shopkeepers and bakers are forced to constantly raise their prices. Flour and other ingredients are becoming more expensive by the day. The pandemic has also kept tourists away, which for many was their main source of income.
Turkish President Recep Tayyip Erdogan, Turkish president says he is “determined to bring the rising inflation back to single digits.”
(Excerpt) Read more at theglobalherald.com ...
Ha ha! Tuck Furkey and Erdogan.
He should have studied Adam Smith instead of Mohamed.
Coming soon to a country near you.
16% per month is nothing...
Zimbabwe’s peak inflation rate was 79.6 billion percent month-on-month and 89.7 sextillion percent year-on-year in mid-November 2009.
The champion. Hungarian pengu in 1946:
https://aroundtheworldin80currencies.com/hungary-1946-the-days-of-hyperinflation/
How fast did they grow the money supply during that fateful year? How fast did they print more paper money? From what I’ve read, the money supply in July 1945 was 25 billion pengo, and then in January 1946 1,646 trillion pengo, and then in May 1946 65 quadrillion pengo and then in July 1946 47 septillion pengo. They were printing money like it was going out of style. They were printing money so fast that halfway through they stopped collecting taxes (now That had to be Fast!), because the tax value of collections one day late had lost so much value.
It stopped in August 1946 when a new currency was introduced, the florint, at the rate of 1 florint equal to one octillion pengos. And of course, they unplugged the printing presses too.
Erdogan noticed that interest rates go up at the same time inflation rises. He seems to have convinced himself that high interest rates cause high inflation, instead of the other way around.
Raising interest rates would be painful, but putting off the inevitable will just make the crash worse when it does occur.
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