When a currency collapses, as the Turkish Lira is right now, there are always questions about, well, what is happening to make it so? The answer, almost always, being no, what has happened? That is, not that there’s a disaster happening, but which disaster happened? The answer here, essentially, being Erdogan’s taking ever more control over the economy. It’s not that everyone sees some looming problem. It’s that having the one authoritarian controlling the direction of the economy makes a disaster near certain to happen, thus the disaster is that authoritarian control over the economy:
The Turkish lira has collapsed to an all-time low against the dollar, but the country’s leader has brushed aside concerns, telling Turks “we have our God.” The Turkish President Recep Erdogan then followed those comments up Friday by urging Turks to sell dollars and gold and buy lira.
God may well be a good investment for eternity but not known for being a great way to buy bread today. That concentration upon the one does rather devalue the other – just as the religious keep telling us that a concentration upon money is not paying enough attention to God.
The Turkish lira added to its steep losses on Friday, hitting a fresh record low, after President Donald Trump authorized the doubling of metals tariffs on Turkey.
The lira traded down 15 percent against the U.S. dollar at 6.38 after Trump made the comment in a tweet. The currency also traded down 20 percent earlier in the day, reaching a record low.
That’s not going to help of course but the Turkish economy doesn’t depend upon metals exports to the US:
I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!
— Donald J. Trump (@realDonaldTrump) August 10, 2018
Not helpful, but not the cause.
The lira extended its plunge to almost 17 percent and hit a fresh record low as the U.S. move dealt yet another blow to the currency buckling under the weight of runaway inflation and one of the widest current-account deficits in emerging markets.
Those are the economic causes. And if there was a truly independent central bank in Turkey then interest rates would be rising strongly to deal with both of those problems. But Erdogan has both reined in any independent sources of power and also set his face against interest rate rises. Which is exactly the problem that really worries, that concentration of power into one pair of authoritarian hands. Bitter experience tells us that this doesn’t work out well therefore, markets being forward looking, when it happens they wilt.
the more islamic a country becomes the more it descends into a shithole/basket case
(1) There are few successful innovators in an Islamic Republic. Nor importers.
(2) “Islam” means “submission”
A tribal society falls behind a meritocracy in economic terms until it can only react to the resulting clashes by killing the others’ civilians in the most shocking ways so as to try to shake their will. Cf. the American Indians.
When AIDS struck Africa, it wreaked havoc in sub-Saharan Africa, code for Christian and animist Africa. Northern Africa, which is predominately Muslim, was largely untouched. Islam prevents dying from AIDS. So there’s that. Also, most of the killing in the 20th century was Christians killing Christians on the battlefields of Europe. And six million Jews in the case of the Holocaust. Muslims were mostly a no show. Being a peaceful people and all that. And there really isn’t that much violence in the Islamic world today when you consider that there are 1.8 billion Muslims in the world. A million… Read more »
The above would be the “Nobody’s perfect” variety of excuse-making. For the record, being a literal Christian also “prevents dying from AIDS,” or to be precise, removes the disease vector of promiscuous sodomy. No one is claiming that the eradication of a religion defined around murder and renewed by murdering would eradicate all murder in the world. But we could probably eliminate the US Transportation Security Agency soon afterward, if Republicans were serious. I did not claim the existence of Islam was the world’s only, or very largest, evil. It’s important to have a sense of perspective here. Also, to… Read more »
According to the Cato Institute, the chance of being killed by a refugee terrorist is one in 3.6 billion. You’re more likely to be killed by falling furniture. But fearmongering about Muslims makes for good politics. The link is here: https://www.independent.co.uk/news/world/americas/refugee-terrorist-chances-of-killed-one-in-3-billion-donald-trump-immigration-ban-syria-yemen-libya-a7548151.html Vox adds that you’re more likely to be killed by your own clothing. The link is here: https://www.vox.com/2016/9/13/12901950/terrorism-immigrants-clothes Seriously, I’d find something else to worry about. I don’t know, maybe sharks. As an aside, evil does not exist. It is an illusion in your mind. “Evil does not exist; once you have crossed the threshold, all is good. Once… Read more »
Someone’s taken the world population and divided by 2 (deaths per annum). But they must be using a very exacting definition of ‘refugee’ and what constitutes ‘being killed by’ to reach a number that small.
I agree that we tend to over-react to terrorist killings; that’s their point, after all. But anyone that can come up with such a statistic with a straight face clearly has a massive axe to grind.
Have to love how the BBC is trying to blame it on Trump and US Tariffs
The current jolt in the value of the lira might indeed be Trump’s doing; he doubled tariffs on steel and aluminum from Turkey (technically: directed subordinates to file paperwork to do so). The ostensible reason is lack of progress on freeing one American citizen jailed for guilt-by-association. This will play well in the bleachers, but the principle that, cross us once and we will wreck your commerce, must eventually harm America’s reputation as a reliable trading partner.
Trump may also be following Madison’s dictum of ‘you mess with American citizens, we will mess you up”. This is how we got “From the halls of Montezuma to the shores of Tripoli”. Indeed it is one of the necessary requirements for free trade that the leaders of the country don’t try to imprison the trader to extract concessions from the trader or his government.
These days, restraint of trade (tariffs, extraterritoriality of US laws, conditions on clearing transactions through New York City) is viewed by both parties as a key “tool” of foreign relations — especially by this President, who calls himself a fan of free trade (if it’s “fair”). Unless it is a goal of US policy that everywhere in the world be safe and cuddly, military intervention “to protect American citizens” is problematic. There are some countries that Yanks should be told you visit at your own risk, and Turkey is probably one. The current tariff push is reportedly a reaction to… Read more »
Have to love how the BBC is trying to blame it on Trump and US Tariffs
the more islamic a country becomes the more it descends into a shithole/basket case
(1) There are few successful innovators in an Islamic Republic. Nor importers.
(2) “Islam” means “submission”
A tribal society falls behind a meritocracy in economic terms until it can only react to the resulting clashes by killing the others’ civilians in the most shocking ways so as to try to shake their will. Cf. the American Indians.