The rumors running around is that Turkey will default as Erdogan decides to move to align with Iran and Russia and leave the West behind. While there have been speculative attacks on the Turkish economy and US tariffs and sanctions have been detrimental, the initial causes of this growing monetary problem are really all internal. Erdogan’s management of the economy has been a disaster. He has pretended to borrow too much money from foreign investors to stimulate the economy. It is true that the total debt rose to over $450 billion, about half of GDP. Turkish exports and the current account deficit rose to $50 billion. This has led to rapid inflation that has been at least an annual rate of nearly 7% on average during the last ten years. In truth, Erdogan was really trying to build the economy to fulfill his dream of reestablishing the Ottoman Empire and emerge as at least the dominant power over the Middle East.
Unfortunately, Erdogan is stubborn and he really has no way out. He wants his cake and consumes it all at the same time. The rumors running around the trading desks are that he will pull the plug and turn his back on the West. By doing so, he can then justify defaulting on the debt of the “corrupt” West who wants to subjugate Turkey. That will be the justification spin of things. It looks like this will remain volatile into October.
- This is the future they have planned for us…
- Are They Essentially Erasing Most Of The Internet?
- Heads Up: Something big is going down. Just about every commodity is collapsing in price. Things deteriorated so much that all the supply chain metrics have become way less constrained
- Bill Gates: Social Credit Scores Are An “Asset”
- Horrific news from Sodom Island
- China’s Warning ENTIRE Economy Will Collapse In 34 Days
- The Dead Internet theory just got even creepier….
- People Are Going To Go Absolutely Insane When Food Prices Double Or Triple From Current Levels
- CDC is quietly deleting misleading information from their website. The following statement was removed from their website between July 16th and July 22nd
- If you are waiting for recession, inflation down, FED pivot, etc., by the time it happens, markets would have already priced most or all of it in. Right on schedule… Michael Burry says the Big Crash is anytime now!