Turkey commting assisted economic suicide?

royal744

Ad Honorem
Jul 2013
9,960
San Antonio, Tx
Perhaps the comparison would only be truly in parallel if Trump is elected by a majority as many times as Erdogan...
Since Mr Trump did not actually win the popular vote in the last US presidential election - he lost by nearly 3 million votes - his last “win” is questionable at best. Only the ludicrous existence of the “fossil” Electoral College gave him the presidency. If he follows the same strategy in the next election, he might win again, but somehow I doubt he will.
 

royal744

Ad Honorem
Jul 2013
9,960
San Antonio, Tx
What is wrong about destruction of democracy?

Democracy only breed moral corruption, concentration of power with mercantile elites, gimping of national and governmental sovereignty, and enslavement of population under pretext of choice.

If anything, fall of democracy should be celebrated.

Do you have an actual alternative in mind? As one politician (surely not the first) once observed, “Democracy is a terrible system of government - except for all the rest...”. Tell me what is better. I’ll be waiting.
 

royal744

Ad Honorem
Jul 2013
9,960
San Antonio, Tx
What is wrong about destruction of democracy?

Democracy only breed moral corruption, concentration of power with mercantile elites, gimping of national and governmental sovereignty, and enslavement of population under pretext of choice.

If anything, fall of democracy should be celebrated.
Can you please enlighten us and give a detailed description of a form of government that is better and more responsive to the popular will than democracy? I think some detail from you is called for since you appear to know exactly what would be better and more responsive to the public weal.
 

deaf tuner

Ad Honoris
Oct 2013
13,534
Europix
Would you please be kind enough to tell me which planet you’re from?
Planet Earth.

And he's right:

1. The supreme ruler is always right.
2. If the supreme ruler is wrong, You apply the first paragraph.
3. You don't have to workout Your brain by thinking anything. First two paragraphs are the answer to everything.

Have a tranquil life, royal !
 

Fox

Ad Honorem
Oct 2011
3,891
Korea
So to follow up on that, some time back Turkey actually did break down and raise interest rates, and by a massive 6.25 percentage points! This seems to be a large part of what is responsible for keeping the lira from continuing to drop too much, as it amounts to a reduction in the monetary supply.

The lira has risen against the dollar after Turkey's central bank hiked interest rates to 24% on Thursday - the biggest increase in President Tayyip Erdogan's 15-year rule.

The hefty 6.25 percentage point rise is the bank's latest attempt to stem the currency's collapse.

The lira is down 38% against the dollar this year despite Thursday's slim gain.

The move came despite Mr Erdogan repeating his opposition to high interest rates earlier in the day.

He has repeatedly blamed the central bank for high inflation, which hit almost 18% last month, its highest level since 2003.

However, a diplomatic row with the United States and concerns about the president's influence on monetary policy have eroded investor confidence in Turkey in recent months.

...
That seems to have bought Turkey some time, but now we see, "Turkish lira weakens on concerns of looser monetary policy."

ISTANBUL, Dec 4 (Reuters) - Turkey’s lira weakened some three percent on Tuesday amid increased expectations of an early loosening in monetary policy after data showed the country’s annual inflation rate eased in November from a 15-year peak.

The lira fell sharply earlier this year due to investors’ concerns over the central bank’s ability to respond adequately to high inflation as it faces pressure from President Tayyip Erdogan to lower borrowing costs.

Official data showed on Monday that annual inflation eased in November to 21.62 percent from a 15-year peak, on the back of tax cuts, discounted products and a stronger lira.

The fall in inflation has triggered speculation that the central bank will cut rates earlier than anticipated, said Piotr Matys, an emerging market forex strategist at Rabobank.

“If they indicate that they may start lowering interest rates in Q1, the lira may extend its losses,” he said, when asked about his expectations for the central bank’s rate-setting meeting next week. He added that the lira could stabilise if the central bank reassures markets that it will keep policy tight.

The monetary policy committee will announce its rate decision on Dec. 13 at 1100 GMT.

The lira weakened to 5.4140 against the dollar by 1513 GMT from Monday’s close of 5.25. It reached 5.46 earlier in the day, its lowest point in around two and a half weeks.

...
It will be interesting to continue to watch this unfold.
 
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Dan Howard

Ad Honorem
Aug 2014
4,048
Australia
Turkey has a lot more trouble than a falling currency. Record levels of consumer debt and rampant inflation are far worse. The only thing that will stave off a complete collapse is an influx of foreign funds yet the opposite is happening. Just this year over $4.2 billion in foreign funds was withdrawn from the country. As of the end of last quarter, there were no financial resources available from abroad.

The only option left is to raise interest rates, which will destroy Turkish consumers. Banks are starting to panic. The official interest rate rise is 6.25% but in reality it is far higher. The average housing mortgage rate in the first quarter was 13%. Today is is 29%. Today, unregulated peer-to-peer and crowdfunding sources are grabbing a higher piece of housing pie than ever before. There is no oversight and no regulation covering these schemes; it isn't illegal for an unscrupulous manager to embezzle those funds.

In 2017, 1.1 million people were delinquent on their loans. Today it is 3.2 million. What's worse, the banks claim that they are unable to recover more than $3.5 billion, or 21%, of those debts. Next year, non-performing debts are set to explode.

Add to that the level of foreign debt. Turkey’s foreign currency-denominated debt is around $US437.7 billion, which is around 50% of nominal GDP. However, that was when Turkey’s exchange rate with the US was around 3.96 lira per US dollar. At today's exchange rate the debt to GDP ratio is closer to 90%.
 
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Fox

Ad Honorem
Oct 2011
3,891
Korea
Erdogan gets emergency powers to use if Turkish economy under threat

President Recep Tayyip Erdogan has been granted emergency powers that give him broad authority to act when Turkey’s financial stability is deemed to be under threat.
Parliament voted late on Wednesday to authorise Erdogan to take all the necessary measures in case of a “negative development” that could spread across the entire financial system. It also approved the formation of the Financial Stability and Development Committee that will work to co-ordinate efforts against risks to financial stability and security, according to the law, set to go into effect following the president’s approval.
Turkey is strengthening its defences six months after the lira’s crash rippled through the economy.
Under the law, “the president is authorised and responsible for implementation of all measures beyond the powers” of members of the Financial Stability and Development Committee, which will be formed under the supervision of the Treasury and Finance Ministry.
Turkey’s economy is still reeling from the currency meltdown that the authorities blamed on a foreign conspiracy amid a diplomatic crisis with the US.
Separately, Turkish lira traders have some risks to navigate over the next few months but the prospect of a central bank misstep before municipal elections in March may no longer be one of them.
By leaving interest rates unchanged on Wednesday and keeping its rhetoric over the dismal inflation outlook hawkish, the central bank is helping dispel speculation it could usher in a new wave of currency depreciation with monetary easing before the vote on March 31.
The lira “seems to be free of the risk of a premature cut ahead of the local elections,” Inan Demir, an economist and Nomura Plc in London, said in a note.
The prospect of looser policy had weighed on the lira. Until Wednesday’s move to leave the benchmark at 24% for a third consecutive meeting, it was off to the worst start among emerging markets this year. But the currency strengthened after the announcement to lead an advance among peers. The central bank’s next decision is on March 6.
The Turkish currency gained more than 2% against the greenback on Wednesday, trimming its losses for the year to below 1%. Nomura sees the currency extending its appreciation 5.15 per dollar.
On Wednesday, the Monetary Policy Committee led by Governor Murat Cetinkaya kept its language largely unchanged from last month’s statement, vowing to deliver “further monetary tightening” if necessary.
 

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