FILE PHOTO: A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. REUTERS/Murad Sezer/File Photo
On August 13th, Turkey’s lira fell down an all-time low. The Turkish lira has been rapidly losing value against the US dollar after a diplomatic fall out with US President Donald Trump.
On August 10th, the lira surpassed the Argentinian peso as the world’s worst performing currency in 2018, having fallen more than 45%.
Turkish President Recep Tayyip Erdogan attempt to tackle the crisis has only made things worse, he blamed the plummet on the economic war with the US, called for citizens to trade gold and USD for lira, and even referencing God.
The collapse of the Turkish lira, however, carries big risks for Asia and Europe, where equity prices of banks exposed to Turkish debt went down on August 10th. Banks in Spain, Italy and France are most at risk of contagion, as well as emerging markets such as Argentina and South Africa which are exposed to Turkish debt, according to analysts, cited by The Express.
In a response to the crisis, Turkish Bank Garanti has blocked customers from opening new foreign exchange positions, making it harder for people to sell lira for USD, pounds and euros.
As of the morning of August 13th, analysts, cited by the Express, have issued a crisis warning. Chris Weston, of online trading firm IG Market in Melbourne, warned global markets would be on edge as investors tried to assess the impact of the crisis on European banks which have lent money to Turkey. The European Union’s financial watchdog has expressed concern about EU financial exposures to Turkey. And so, if it is a concern for this institution, then it should be for traders too. Turkey’s massive pile of corporate debt denominated in foreign currencies, but a rapidly sliding currency – and inflation that’s threatening to go exponential – is a toxic combination, he said.”
On the same morning, Turkish Financial Minister and Erdogan’s son-in-law Berat Albayrak said he had prepared an action plan to deal with the crisis. At the same time, a spokesman of the Istanbul prosecutor’s office announced that the prosecution had launched an investigation into individuals suspected in organizing actions against Turkey’s economic security. According to the announcement Turkey is under an economic attack and the prosecutor’s office will take action against all written and visual news as well as social media accounts which it deemed to serve towards the purpose of this attack.
The plummeting of the lira has sparked a global sell off in the emerging markets. The Express cites investors who fear that the sell off may have a ripple effect in the global financial markets, with the euro, South African rand and Mexican peso already taking a hit from the lira. The lira pared some of its losses after Turkey’s central bank said it had lowered reserve requirement ratios for banks. It also said it would provide whatever liquidity banks needed and take all necessary measures to maintain financial stability.
Also, on August 13th, the Turkish interior ministry announced that it is taking “necessary legal measures” against social media statements that create a negative perception of Turkey’s economy. According to the ministry, 346 social media accounts that posted comments about the weakening of the lira “in a provocative way” have been identified since August 7 and legal action has been launched.
A Presidential spokesman, on the same day, announced that the Turkish economy is strong and that nobody should pay attention to “speculation.” He further said that the Treasury, Central bank and Banking watchdog were all taking the necessary steps to rectify the situation.
During a speech to ambassadors in Ankara, Turkish Foreign Minister Mevlut Cavusoglu said his country had done enough to repair its ties with the US and accused Washington of acting contrary to their alliance regarding fundamental security issues. He also said that the US should not threaten Turkey if it expects to achieve any results.
On August 13th, The Turkish Central Bank launched its economy-stability plan. It promised to provide “all the liquidity the banks need,” in order to ensure financial stability. The bank’s statement said the following: “the central bank will closely monitor the market depth and price formations, and take all necessary measures to maintain financial stability, if deemed necessary.”
However, there are concerns that the central bank is not independent, with Erdogan keeping interests low, calling high interest rates an instrument of exploitation and calling himself “the enemy of interest rates.” The concerns regarding the central bank’s independency are also reinforced by Erdogan appointing his son-in-law as the Finance Minister.
Turkey has, in recent years, become one of the fastest-growing economies in the world, in the second half of 2018 they reported a 7.22% growth in gross domestic product. However, this expansion was fueled by foreign-currency debt. According to analysts, cited by CNBC, while other countries were recovering from the crisis by their respective banks pumping money to stimulate the economy, Turkish banks and companies were going into USD debt.
On July 26th, the Trump administration threatened to impose heavy sanctions if Andrew Brunson, a jailed pastor, is not released. The deadline, according to Erdogan was August 8th. Al Jazeera cited a White House official who claimed that there was no deadline sent, however that the US expected Brunson to return to the US a long time ago.
In response to US sanctions, on August 10th, Erdogan warned Washington that it should stop viewing Turkey as a lesser partner or “come to terms with the fact that Turkey has alternatives.” On August 12th, the Turkish president said: “Our response to the person who wages a trade war against the whole world, including our country, is to head towards new markets, new co-operation and new alliances.” Thus, Turkey’s crisis and the rapidly deteriorating relationship between Ankara and Washington is quite possibly leading Turkey to partnerships with Russia.
It looks like Crazy Erdogan is clueless as to what to do to stop the fall. All his suggestions to stop the fall seem more like ravings of a mad man then actual solutions. Maybe he should retire to a bunker underneath Ankara, where he can froth at the mouth at his generals while he gives orders to imaginary Jihadi armies?
On the plus side this may occupy his mind enough so he won’t be in a position to object to the upcoming Idlib offensive of the SAA?
Unless the BRICS take up the debt of turkey and also China bail her out, by selling US debt and taking over her ready in place industry and use it, as cheap labor. In one stroke they achieve hostile take over.
turks where ertogan put them have very little choice in the matter. They already in a free fall. At the same time they do their best to start a war in cyprus and greece, as well hold on to what they got in Syria…… Their only option now, is to be sold, on the highest price they can get. And change one money lender to another. Kind of, like the slaves, who celebrate because they changing masters. I guess his time come to realize he is neither mohamed, not some kind of a messiah, but an opportunist that has been catch between the sledge hammer and a very hard place.
It be very interesting what follows.
“And change one money lender to another”
Except that one does not lend money, but more debt (Zionists), while the other backs money with gold, a real positive value, so that a country has the hope of not entering a vicious circle ending with its destruction.
Think what I said and understand it from the correct black and white way of the international business. I dont understand, whom does not lend money or whom you mean. I am not speaking neither politically or taking sides and present what I like to be.
I am talking of the only option ertogan has, if he want to stay afloat, and not be lynched by the same people, who until yesterday consider him their savior.
sorry bro….but no….you cannot play the devils game and believe that you have a chance of winning.Its the jews game.Its the monetary system on the entire planet.CHINA????? hahahahahaha what you think that china controls anything??BRICS???? are you serious??? ALL monetary system on our planet, no matter where you are, is controlled by the JEWS.100%.Thats THEIR GAME. Think of IRAN.They are getting hit year in and year out through the monetary system.Dont kid yourself, 80 million +, dont u think they are trying everything possible??Russia? people tend to think, espeically here that russia is doing great right now, and all those new weapons systems, the war in syria,, russia is very close to an uprisiing, just as iran, just as turkey,just as argentina….they are all getting hit by the jew weapon.. the monetary system, and nobody of them can do something about it. Just a couple of days agao, there was an article here about medvedev in russia, and what he said in aninterview about the low pensions in russia……you seee they cannot, nobody can get out of the monetary system on our planet as soon as he trades with other countries.It aint possible.And no country till now, is 100% selfsufficiant. Sooner than later the world will have to face the truth.Our planet has been hyjacked from very evil beiings over 2000 years ago.And ever since, we all have witnessed mass murder on an epic sclale, year in and year out.Name the pricks.They call themselves JEWS.And if we non jews, no matter what skin colour or country one is from dont come together to fight these evil beiings, they will make sure that we all non jews will soon fight each other in a nuclear war.Thats their goal ever since.And only through our stupidity can they achieve their satanic utopia. A One World Government, with Jerusalem as its capital under jewsih satanic Leadership.
peace , love and harmony
I often enjoy reading of people who think they know kid. And no the jews as you mean them do not control everything if that was the case then it be no war and you be either an employee to a global company or an outcast, just like the 50+ millions of none registered in US. In their majority homeless.
The rest you saying, come from complete ignorance, of reality and they dont deserve an answer, I am not here to teach and in real life where things actually happening, what you say does not exist as reality, or your jews or any other nationality. Just very powerful people who play for territories and dominance over the rest. And their last worry is what is yours money.
Money they been created to control you not them. So you have many things in your mind explained, very wrong in your mind and may be is good idea to search a subject and learn reality and what is happening within it, before you write all you have and are assumptions of yours not fact.
Actually your not 100% correct. How the monetary system works is controlled by Zionist Jews in particular the Rothschild’s. The BIS (Bank of International Settlements) is the boss bank of ALL the banks.The Central banks borrow money from BIS. IMF and World bank are all Rothschild owned and most of the central banks are too especially in Europe. The Rothschild owned Banking Institutions borrow money to both sides of the conflict. The Rothschild’s have a lot of front companies in all sorts of industries including military and defence, media, pharmaceuticals, energy, education, science and technology. Of course been front companies they can hide their identity. But ultimately they have a lot of control. There are of course 7 other rich families that make up the top 1% of the worlds wealthiest. I quote from an article on VT… “Professor Carrol Quigley named the following families as the foremost banking families: Rothschild, Morgan, Lazard, Erlanger, Warburg, Schroder, Selingman, the Speyers, Mirabaud, Mallet, Fould, Baring. One could add the Rockefellers at this point in time also, although Professor Quigley did not include them in the list when the book was written. One wonders how many people have ever heard all these names. These families generally remain hidden from view by design. Secrecy is of the utmost importance to their survival and to the continuing consolidation of their sinister grip on the globe.” Do a little research on these names and see how much of the above industries and institutions they own, have majority share holdings or sit on the boards of the corporations that are the main players in the above industries and institutions. The wealth they hold is staggering. Here is an article on the BIS https://geopolitics.co/2015/04/12/bank-for-international-settlements-bis-the-vaticans-central-bank/ Unfortunately we are ALL p’wned by them.
yes they control the western world and not how you suggesting the rest of the world. Your confusion comes from the fact that the competitors of all those you mention still are using western tools for international transactions.
If it was as you think it, then nothing that is happening around the world will be happening because then all belong to the global companies. So in their world what you saying is a fact and is simple why is their world their system. To the rest of the world that is not a fact.
BRICS? B for Brazil, the Real isn’t very stable. R for Russia, do I need to say more? I for India, how far can the Rupee fall? C for China, read some news. S for South Africa? Krugerrand’s?
The BRICS have been targeted by the US for economic oblivion, the only safe haven is gold, and the US has tried to beat it down as well, but because it is the only true money, US$1200 seems to be the limit of American power.
Turks should buy gold with their lira at least precious metals will retain value
that way i think that the lira would lose even more value.
the right way is probably to ask gold in exchange of domestic products, but i’m far from being an expert in finance and economy.
Gold and silver coins was the way man did it for thousands of years, this American experiment is only 50 years old, and the wheels are falling off.
now to the turks 1 kg of gold buying with lira is like paying for gold 1000 euro worth 6000 euro. Do the maths then offer advice.
Do the math hold onto lira & it still loses value. Better to spend it before it drops further
k this is what you do with your money, when you have some.
I have 10% of my savings currently in gold ounce coins & some crypto. The lira has lost 30% this year. Had people bought gold/silver 6 months ago they would have protected some of their purchasing power. What is the point of keeping say 1000 lira in cash under your bed if its dropping like a rock. A 1000 lira worth of gold today may cost 1200 in a few weeks.
doubtful
True it wont drop anothr 20% in a few weeks that was just an extreme example but if a currency is falling why would you hold it? better to exchange it for an asset class that is stable.
life is not a theory. As I said, try it and see where it get you. Beside the fact that the people who have turkish money, is the population of turkey and 99% of them need the money they making to survive and feed their families not many have money to spare so what you speak is just sound good in theory.
Ahh you have a crystal ball, and can see into the future? I also have a crystal ball, and my ball reveals US$30k for gold, and $1k for silver. If you had some gold, you could afford trade in your old ball for a new one?
You are assuming that the US has finished devaluing the lira? Do the math.
the one is assuming kid is you and you do this all the time how old are you 10?
So here we are, a day later, and the lira is down another 7%.
The older I grow the more I distrust the familiar doctrine that age brings wisdom.(HL Mencken)
that dont make what you said correct. The turkish lira, is going as low as the system that attack it, can take her. Even a 2 year can see that. But what you suggested and I answered to was wrong as it is also now wrong, what you think.
I think a lot of Turks have done just that. Erdogan was asking them to sell their gold for lira :)
People in emerging markets are starting to realize that the only safe haven from American economic terrorism is gold. Anybody with any money in the bank, would be wise to swap it for gold, a currency war is under way, and all currencies are at risk of an American attack.
Remember you need to take physical hold of your gold. There is many times more gold paper sold then the world has real mined gold. I like the idea gold Jewelry wire or simple gold wedding rings as it is easy to cut and test them for real value, easy to store, hide, trade, etc. Very little markup over metal cost in them.
hhahaha…folks…common lets not be childish here.. its sooooooo obvious……..THE JEWS are now punishing turkey for various steps that turkey took in the last 6 months, including; buying the S-400, taking over afrin area from the kurds,´(which were israels ace card in the syrian war),non compliance of iran sanctions and the ever more dangerous moves away from nato(please dont forget that turkey is THE STRATEGIC PARTNER of nato on russias southern flank….when nato looses turkey the whole strategic balance shifts away from nato to russia in the south) p.s. There is absolutely NOTHING NADA ZERO that turkey can do to stop their currency from falling into the abysss.Thats the jews game.The monetary system on our planet, no matter what country one talks about, is controlled not 98% but to 100% by JEWS.
Especially in China. In Mainland China the banking sector is controlled 113,5% by the jews.
Well, China isn’t, still some work to do (((EG Korvin))).
The US dollar is a paper currency of which value should be not more than 10 breads or 10 Eggs.
I don’t know where you get your eggs, but around here an egg is worth about 30 cents. Maybe 3 eggs to the dollar?
That is true.
Same in USoA.
Oh bullshit. Walmart sells a dozen eggs for $.75.
Nice reference anchor, you can always eat eggs.
Rob, everybody would start( his own chicken farm, and eggs would lose their value.
I have given example if in a country the products prices go up so the currency value will go down. If a country production is high then the prices will go down. If a country dependence on foreign countries is minimum for imports then the prices will go down. That is why every country should produce everything that they need to import from other countries. They should develop agricultural forms and industries.
And so are you ;))
the Abyss will be when NATO lose Turkey as strategic partner…and allow Russia to build a base near Bosforous strait…..
Seems like the total world chaos thing is coming right along rather nicely.
Looks like turkey ran up the credit card before defaulting. Lol pretty funny.
Turkish government now allied with Syrian, Iranian and Russian governments and kicking asses of US, NATO and their partners Israel, ISIS, Al-Qaeda, PKK.
That should be a comfort for Turks since all three have failing currencies.
If your country does not obey the USA, they trash your economy, it’s the American way. The world needs to move away from the US dollar, it would be a good thing for the whole world, including the average American. Gold is the only true money, all the others are merely IOU’s.
Trump has paved and greased the road for a remake of the world and USoA great Depression of 1929!
And yes “Lady Jane” this depression like the one before it that lead to WWI lead to WWII.
It is fair to say that one way or another USoA wants and needs WWIII to wipe out its Trillions of foreign debts.
Your last line is interesting. but it’s not foreign debt. It is debt to the central banking cartel. To private individuals. To “wipe out” the debt cannot happen. But they might try to invade another country and rape and pillage it in order to keep up the payments! Like Iraq. The only other option is to sell US land to the central banks, which then will end up owning America quite literally. The debt cannot be wiped out because it is the mechanism of our slavery. How do slaves become free?
We should take note of how Russia and China are moving into holding very large amounts of Gold. Also the US dollar has no value in a local economy except for the cost of imports and external travel. Government can demand all local commerce be done in local currency. Barter with friendly nations and say fuck the USD.
The USD could be crashed by any nation that the USoA must import its goods from, hint China today.
Turkey won’t be able to buy American weapons! The Federal Reserve dollar is under pressure. The international bankers will deliberately collapse several currencies before the dollar hits the ropes. They collapse the country’s economy and then go on a buying spree for government assets for bottom penny. It’s been done before. Every few years a country must fall to feed the creditor-beast. All the “politics” around this event is incidental.
I like the star trek future where money doesn’t exist and people better themselves to better humanity lol :)))
China can rescue Turkey easily by rolling over Turkish debt (buying the Turkish debt) with some of its 2 trillion USSA dollars.
Switch erdogancoin for the real coin