Turkey about to implode?

[MBE2017]

With Turkey currently experiencing 50% inflation in the last twelve months, struggling to raise foreign exchange despite their claims their scheme is doing well, we now see what should be a huge red flag to any normal person.

Turkey has now asked its citizens to swap their gold jewellery for the countries currency, how long before this becomes mandatory I wonder? It seems nothing is going to help this badly managed economy, let’s hope other countries can learn some lessons fast.

 

[japancool]

Hungary and Poland lose EU funding fight over laws

The two states had challenged an EU rule that allows funds to be conditional on democratic standards.

www.bbc.co.uk

 

[The Byre]

I must admit that I have not studied the Turkish economy, so all I know is that they are screwed by having a lunatic president in Erdoğan who buys into the whole MMT nonsense, i.e. that inflation is not a monetary phenomenon as Milton Friedman stated, so a government can create any amount of extra currency to pay its bills and stimulate the economy and this will not cause the value of a currency to fall. He has made it worse by citing the Islamic doctrine on usury, thereby insisting that interest rates are as low as possible.

It seems to be a perfect meeting of ignorance and arrogance with the imbecilic.

Much the same seems to be happening in the US and elsewhere, though at a different pace.

 

[WaveJumper]

Yep their currency has been totally screwed for a while now the only people unfortunately benefiting are those who are shorting the hell out of it.

 

[japancool]

so a government can create any amount of extra currency to pay its bills

And are they, in fact, doing this?

 

[The Byre]

And are they, in fact, doing this?

Yes, by keeping interest rates stupidly low, yet simultaneously maintaining a fractional-reserve banking system and a fiat currency. This encourages (well, almost forces!) people and companies to go into (cheap) debt, safe in the knowledge that effective interest rates (set rate minus inflation) will be negative.

It is the creation of debt that is the immediate creation of currency, but the central bank has to create all that new currency and hold that as bank deposits, thus keeping it out of the real economy. But sooner or later, it bleeds through into asset prices (e.g. stocks, houses) as those debts are incurred. When the punters cash-out by selling their houses or stocks or whatever asset they bought on credit, new money enters the high-velocity real economy, causing inflation.

 

[WaveJumper]

There's a good bit of reading here on the subject:

Does Turkey’s economic crisis spell the end for Erdogan? - LSE European Politics

Turkey is currently in the midst of an economic crisis, with the Turkish lira plummeting in value and inflation hitting its highest level since 2002. Balki Begumhan Bayhan writes that ahead of elections set to be held in 2023, Turkish President Recep Tayyip Erdoğan now risks losing his hold on...

blogs.lse.ac.uk

 

[MikeJ]

I seem to recall Turkey having similar problems in the 90s too.

 

[MBE2017]

Turkey now experiencing inflation at just under 80%!

Cannot go on for much longer.

 

[IanSuth]

Turkey now experiencing inflation at just under 80%!

Cannot go on for much longer.

Look at this, it is energy prices really spiking inflation in Turkey, still below the levels seen in the mid 90's when it peaked at over 120%

Inflation rates in Turkey

Inflation rates for consumer goods over the last 65 years in Turkey including comparison with the USA. Price increases for energy and food

www.worlddata.info

This is also sobering

1000 Lira in 1960 corresponds to an amount of 6,165,419,676.31 Lira at the beginning of 2022 due to inflation

I know when i was there in about 86/7 in the 2 weeks i was travelling around it went from 1100 to 1300 lira for £1 on official rates and I got 15000 for a £10 note in the bar opposite the hotel on the last day we were there !

 

[UkAppCoder]

And are they, in fact, doing this?

Suppose someone knocked on your door to collect a debt from you. You have no cash, so you write an IOU. Your creditor takes your IOU, and is able to spend it anywhere.

Are you paying your debt, or are you kicking the can down the road before you can be bothered to pick it up?

I would say that your debt is not being paid.

Why? Because one day someone else will come knocking on your door waving that same IOU and ordering you to honour it.

By the way, is Gordon Brown currently living in Turkey? The reason I ask is because Erdogan might think he's abolished boom and bust!

 

[MBE2017]

For anyone wanting a reminder of what happens when the poor finally get annoyed, look at events in Sri Lanka. The Presidential Palace stormed despite troops firing above the crowds, the President forced to leave for his own safety, the rioters cooling off in the Presidents swimming pool.

History shows how the elites become disconnected from the masses, from the French Revolution to today, nothing is learned, just the same mistakes duplicated.

 

[mindatrisk]

For anyone wanting a reminder of what happens when the poor finally get annoyed, look at events in Sri Lanka. The Presidential Palace stormed despite troops firing above the crowds, the President forced to leave for his own safety, the rioters cooling off in the Presidents swimming pool.

History shows how the elites become disconnected from the masses, from the French Revolution to today, nothing is learned, just the same mistakes duplicated.

I was making this point elsewhere here. Too many people do not take it seriously, but the results can be both catastrophic, paradigm shifting, and VERY long-lasting. Communism, for example. And I don't think we are too far away in the west from finding ourselves in deep economic problems, and the resulting civil unrest that will follow - an unrest that could make the riots of a decade ago look like a pleasant stroll through a meadow.

 

[fisicx]

an unrest that could make the riots of a decade ago look like a pleasant stroll through a meadow.

Those riots were very localised and full of ‘me too’ oiks who turned up for a bit of a laugh. What it wasn’t was mass civil unrest as a result of some government policy.

 

[IanSuth]

Those riots were very localised and full of ‘me too’ oiks who turned up for a bit of a laugh. What it wasn’t was mass civil unrest as a result of some government policy.

And what time of year do they generally happen ?

And what type of weather makes them more likely ?

 

[fisicx]

And what time of year do they generally happen ?

And what type of weather makes them more likely ?

Last ones were in August after the shooting of Mark Duggan.

 

[IanSuth]

Last ones were in August after the shooting of Mark Duggan.

1981 July (Toxteth/Handsworth/Moss side)
1991 September (Handsworth)
2001 July (Oldham, Leeds. Bradford)
2011 August (multiple)

There is usually a trigger but long hot nights seems to be a common factor (Brixton 1981 is an oddity as it was in Apr)

 

[MBE2017]

There is usually a trigger but long hot nights seems to be a common factor (Brixton 1981 is an oddity as it was in Apr)

A long cold winter could be the next trigger.

 

[fisicx]

A long cold winter could be the next trigger.

Except going on the rampage/protesting isn't so much fun when it's cold. Much better to wait until spring when it's warmer.

 

[IanSuth]

A long cold winter could be the next trigger.

I think a few more hot weeks and a inflationary price rise headlines and it could be a lot sooner

When parents get the letters from schools stating they must get uniform from supplier x (school needs kickback money) and they see the prices it could get fruity as well