by Gary Littlejohn for The Saker Blog
It is said that when Groucho Marx was asked how he went bankrupt, he replied “Slowly at first, and then much more quickly”. The Turkish Lira had started to slide slowly and then last week it went down much more quickly. The context for this was made clear by the Moon of Alabama on 10th August, on the very same day that the decline of the Lira reached the tipping point into an urgent crisis level.
The fact that he could analyse it so quickly indicates that the crisis had been developing for quite a while, and so he had already digested the implications of Turkey’s political and economic trajectory. Given that Greece has recently received what is claimed to be the last tranche of its bailout funding from the European Central Bank [ECB] one has to wonder why Turkey apparently learned no lessons from Greece’s long-run debt crisis, or even from the much smaller and shorter financial crisis in Cyprus. Both showed that when the financial crunch arrives, events move very quickly. Even though in Greece the Syriza government had a plan to exit from the Euro and return to the Drachma, when it was ready to do that, it found that the funds had already disappeared from Greek banks. A rapid bank run had meant that funds had disappeared abroad. In the case of Cyprus, only quick-witted wealthy Russians managed to get their funds out quickly enough, by using a bank that also had a branch in London, which was a loophole that the authorities had not thought to close when capital controls were imposed and banks were closed temporarily.
There is no sign that Erdogan or his advisers fully understand the speed with which a financial crisis can develop, despite all the evidence of the last 10 years, or the Asian financial crisis of 1997-8, a crisis from which Russia evidently learned to avoid being so vulnerable again. So what can the Erdogan government do in such difficult circumstances? Until today (15 August 2018) all that had been seen was rhetoric and blaming others, but as the Moon of Alabama pointed out, the economic leverage now available to those hostile to Turkey was provided by Turkey’s own economic policies.
Now that debt in US dollars and Euros probably exceeds 50 per cent of the total debt owed by Turkish financial institutions, and the Lira had accelerated its fall over the 5 days to the 14th August, repaying such debts quickly is impossible. Nor would trade retaliations have a sufficiently large effect to hurt the USA. [The Turkish economy is only about 8 per cent of the size of the EU economy.]
While Erdogan’s supporters helped him to withstand the recent coup attempt, they are not wealthy enough to finance such debts by selling their gold or other assets. It has already been calculated that Turkish commercial bank reserves have effectively been liquidated by the decline in the exchange value of the Lira. Total Turkish government reserves are about $131 billion.
Turkish institutions have borrowed about $150 billion, and it would now take about double the pre-crisis amount of Lira to repay this. This far too big for, say, Russia to support and Erdogan has stated that he did not seek Russian financial aid in his recent phone call with Putin.
Russia has simply declared that bilateral projects such as the Turk Stream gas pipeline and the atomic power plant are not in jeopardy, but then Russia is financing most of these costs and the clear implication is that no further financial aid will be forthcoming. This is hardly surprising when Russia’s reserves amount to $458 billion, only about 3.5 times more than Turkey’s reserves, and Russia too faces sanctions. So it is likely that Erdogan’s denial that he asked for aid is a face saver.
Nor is it likely that China would feel able to come to Turkey’s aid, for two main reasons. Firstly, it has just taken an 80 per cent stake in Iran’s natural gas project, based on the largest single reservoir of natural gas in the world, and it has longer-term plans to build a rail link from Central Asia to Iran. Secondly, with today’s announcement by Turkey of what is called a ‘soft capital control’, the Lira has bounced back today and the financial pressure from investors has suddenly switched to China.
According to the link above, the phrase ‘soft capital control’ refers to a newly announced requirement by the local banking regulator “that the total amount of foreign currency and Lira swap and swap-like transactions can’t exceed 25% of banks’ legal shareholder equity (which followed a similar determination at 50% just two days earlier). The logic behind the move, taken straight out of the PBOC’s [People’s Bank of China] playbook: to ‘kill offshore Lira liquidity to stop foreigners shorting the Lira’….” So foreign speculators are not going to find it easy to buy Lira in order to bet against the Turkish currency.
This is the first sign that Turkey is using what international investors would recognise as credible financial measures to deal with the crisis. Meanwhile, the Lira crisis has made global financial markets more nervous and carries the danger of a global crisis. This now-panicky mood partly explains why China has suddenly attracted negative attention.
Yet the danger of ‘contagion’ within the EU is not over, even though the weak French, Italian and Spanish banks most exposed to Turkish debts are considered to have sufficient reserves to withstand bad Turkish debts. While Turkish debts are not considered to be an existential threat to such banks, the fact is that any additional destabilisation of EU banks, such as a so-called ‘hard Brexit’ by the UK, could destabilise the EU banking system. The ECB is already finding it difficult to buy EU government bonds as a way of pursuing its policy of ‘Quantitative Easing’ (QE, effectively printing money electronically) without causing high levels of inflation, and so QE may be coming to an end as a policy fairly soon. Since this is happening at a time when the US Federal Reserve has made it clear that it wishes to raise interest rates, and the Bank of England has just done so, the nervousness on global markets that the last 10 years of cheap credit might be coming to an end is understandable. So the Turkish Lira crisis may be seen as a possible precursor of a much wider financial crisis, whose likelihood is increased by Trump’s trade war measures.
The actual point of origin of any such global crisis can only be guessed at, and while many might expect it to start in the USA as it did in 2007-8, it could well happen within the EU, where many banks are comparatively over-stretched dealing with what are politely called ‘non-performing loans’. These problems are exacerbated within the EU by the large flows of funds from southern EU countries to northern ones.
The Moon of Alabama pointed to the sort of political price that various countries might extract from Turkey now that it is suddenly in a much weaker position. Readers of the South Front website could readily outline the probable implications for the Syrian conflict. Neo-Ottoman dreams of a buffer zone between Turkey and any Kurdish groups seem far from being viable.
With regard to the recent BRICS conference in South Africa, where Turkey suggested that it might join BRICS, that will inevitably be shelved at best. I am not aware of Turkey having engaged in any of the currency swap arrangements signed in recent years by Russia and China with various partners, and so Turkey’s references to reorienting by turning to new allies and markets carries little credibility in the short run. Yet I expect Erdogan to resist calling in the IMF since that will be seen in many quarters as a public surrender to the USA. That may scare off Western tourists (and the share price of the large German travel firm Tui has declined in recent days) but Russian tourists might still take their holidays in Turkey. The alternative to the IMF is probably stronger capital controls, rising goods shortages as international trading becomes more difficult, and fairly high inflation. In the longer term of such a scenario, food rationing cannot be ruled out.
UPDATE: 16th August 2018
It now transpires that part of the reason for the ‘bounce back’ by the Turkish Lira yesterday was that Qatar had pledged to shore up Turkey’s finances with loans worth $15 billion.
This is enough to give Ankara a breathing space, but is only about one tenth of the commercial loans taken out by Turkish banks. Qatar has part ownership of the large Iranian natural gas field in which China recently took a controlling stake, so it is clear that Qatar is aligning itself with Iran, Turkey, Russia and China in the face of Saudi hostility and US sanctions and trade tariffs. It remains to be seen what other measures Turkey can now take to shore up its position in the longer term.
The British and American news sites quoted above clearly take a very pessimistic view about the prognosis for Turkey..
(Worth remembering however that in 2014 with sanctions being imposed on Russia they were predicting that it would also.collapse)
Are the western media ever right about anything and are their opinion pieces just wishful thinking?
Zero hedge is an American business news site. But what is the Turkish Chamber of Commerce’s view of the situation?
“Today is the day to unite and work in solidarity for the future of a strong Turkey. We are answering President Erdoğan’s call for currency mobilization as a single entity, and we say that we are behind him. We owe it to our nation to work harder. The Ankara Chamber of Commerce is resolute,” said President of the Ankara Chamber of Commerce Gürsel Baran.”
As the government takes the necessary steps, citizens have exchanged their foreign currency holdings into the Turkish lira. A slew of support messages streamed in from the business community, calling the Turkish economy strong and durable”
And neither Erdogan nor the country in general look they are going to cave in any time soon.
“Erdogan has called on Turkish citizens and businesses not to panic over the currency crisis, and to trade in precious metals and foreign currencies to support the lira.
In addition, Turkey has pledged to start trading in national currencies with its major partners in the likes of Russia, Iran, China, and Ukraine.
It is worth noting that Ankara’s thus far bold response to Washington’s economic war comes simultaneously as Russian Foreign Minister Sergei Lavrov visited Ankara yesterday to discuss boosting Russian-Turkish economic ties and coordinating operations in Syria.”
US sanctions mania might backfire spectacularly.
Anatoly Aksakov, who heads the Russian State Duma Financial Committee said –
“More and more countries are considering transactions in national currencies. Meanwhile, the BRICS countries, which Turkey seems to be interested in joining, are discussing the possibility of creating a new currency for payments within the BRICS,” he said, referring to the bloc of Brazil, Russia, India, China, and South Africa.
Leonid Slutsky, head of the State Duma’s Foreign Affairs Committee, told Anadolu Agency that Russia is standing by Turkey in a difficult situation.
“We are here, with our Turkish friends. We’re glad to see that lira has started to recover from the first shock,” he said.
“Russia got a similar shock when the ruble’s value fell sharply in 2014. But it’s not the end of days.
“Turkey has all the necessary resources — political will, intellectual power — to deal with this challenge. Turkey is not a country that can be suppressed by attacking its national value.”
.My guess is that as with predictions of doom for Russia in 2014 and Iran in 2018, the western opinion pieces are mostly wishful thinking…
At this rate 40% – and rising – of the world will be trading outwith the dollar in the near future a loss of power the US will find impossible to overcome.
Your assessment is correct.
Also note, the above article’s statement “… I am not aware of Turkey having engaged in any of the currency swap arrangements signed in recent years by Russia and China with various partners …” is already outdated. RT reports today (Wednesday, 15 August):
“… Ankara has given a green light to Moscow’s proposal to switch to ruble-lira trade between the countries. Turkey also has similar plans for trade with China and other countries. …”
To Russia Turkey is more important as a potential candidate to leave NATO than a trading partner. It has certain economic interests in the country, like the building of the South Stream gas pipeline. However, oil rich and gas rich Iran is more important to Russia, it’s inclusion into the Eurasian Economic Union eagerly anticipated.
Can Turkey survive the current financial crisis ? It remains to be seen. It might. I am not too fond of accepting Western economic evaluations of countries, as they are more often wrong than correct. However, this situation is indeed dangerous to Erdogan, as sanctions were obviously introduced to destabilize the country, as the 2016 coup d’etat against him failed. Wed shall see how he handles the situation.
The latest israeloamerican attacks on turkey provide more reason for turkey to look east and multipolar. Part of turkey is slated to become a part greater israel, the rest to become balkanized colonies. They need turkey to fail, so they can move in. Hense the spin provided in the zionazi sources referred in the header article. Part of zionazi-gay population management consists of assigning the illusion of failure to any the zionazis want brought down. It is a demoralization technique.
Vot Tak: “”Hence the spin provided in the zionazi sources referred in the header article.”‘
Yes, I noticed three Links to Soros-funded AZC mouthpiece The Guardian; also, Zerohedge described above as a U$ business news site.
The situation is made even more confusing by the fact that a portion of Turkey is actually in the Balkans. Does that mean we are looking at a Balkanized Balkan situation? I sure hope those resulting Balkanized Balkans states are stable, because if one of them runs into trouble we could be looking at a Balkanized Balkanized Balkans situation, and I don’t know if the world can handle that!
Only the former Greek city of Constantinople is in Europe, something the Turks were using as an excuse to join the EU.
BF, correct. But there more of it. It’s the part of Thraki, which Turkey still holds. North side of Dardanelles. This is the part which gave the name Byzantium to the Eastern Empire (from the City named Byzantio at the mouth of the river). Turkey, should never be considered a European country, ever.
As for the Russia surviving the financial onslaught by the NY gang is only because Putin’s team was preparing for it since he came to power in 2000. The other countries, like Turkey, Greece, Italy, Spain, Portugal, Ireland are all blinded by their belonging to NATO thinking that their friend and boss and an ally won’t do it to them. Erdogan is no Putin, he may be smart but I am not sure if he will survive without Russia’s help, and this means that Erdogan must leave NATO and stop playing his sultan hardball game. USofA has just fed him to Putin, oh so smart.
Forget China’s help without him dropping the support for the Uygurs, he has to sell them to China before he gets one dime.
”Turkey, should never be considered a European country, ever.”
Haha, agreed. No faggot parades and no gender confusion prevalent in Turkey. Seriously, what the bugger was Turkey expecting to achieve by pandering to the Euro-trash?!
Moreover, if Turkey does ditch NATO, that would leave an absolutely indelible mark upon the latter’s Eastern European members as the disposable refuse that they are. It’s quite telling that Putin talks to and actually involves Erdogan and Turkey as part of his planning while very little of his and Lavrov’s time is wasted on America’s useless Euro-trash poodles in the Balkans. Very accurate judgment on the part of Russia, as always.
“”Turkey, should never be considered a European country, ever.””
I don’t think the Europeans ever considered Turkey a *real* European country.
Even though a large portion of it is geog. in Europe.
Perhaps partly because they confuse Turks with Arabs ?
At this point, though, there are so many Turks in Europe as a result of the many Gastarbeiter who settled there in the 1970s and ’80s, many of them marrying European women—the question of Turks qua Europeans has become a bit muddled.
Kat, No they are not considered to be Arabs but Turkmen (Tatar and Mongols including). Although I must say that Turks did not start moving on Byzantium until they conquered the Arabs and converted to Islam. After that they were able to muster a huge army consisting mostly of Arabs which they used to move on Byzantium. I’ll never forget a comment of an Iranian guy, at VT, may years ago, where he said that only 5% of Turkey’s population consists of what can be called Turks. The rest belongs to local indigenous population, which was forced to call itself Turks. Many are still Crypto-Christians.
The famous Turk, who became a father of modern Egypt was actually a Greek, who called himself a Turk
Famous Ali Pasha.
I am back with short note, to those reading Wikipedia page about Pasha. He was a Greek just like majority of people in Albania, these people are called Arvanites, whom Albanians perceive to be Albanians. Unfortunately for them it is the other way around. Example, one of our famous general of the independence war was said not to even speak Greek, but only Arvanite dialect: https://en.wikipedia.org/wiki/Georgios_Karaiskakis
As a curiosity, Pasha was fighting against Greek uprising, until he started to lose the war and then run away to Egipt. He was personally involved in murdering (an outrageously painful death) one of our greatest heroes of the independence war, Athanasios Diakos: https://en.wikipedia.org/wiki/Athanasios_Diakos.
I will end, that he was diakos (deakon) for real, not only by name. Just before his death Pasha tried to convert him, but Diakos chose to die instead.
Actually, a fairly large and fairly important portion of Turkey is on the European continent, west of Istanbul, where Turkey borders Bulgaria and Greece. And inncluding the Sea of Marmara and its coastline, the Dardanelles, Gallipoli, the inland city of Edirne.
Istanbul is the former Constantinople, the capital city of the Byzantine Empire. It’s a Greek city. So is the land around the city. Turkeys hold over it is highly questionable, historically and legally. What is quite bizarre is that Turkey has a national holiday, celebrating the capture of the city and openly admitting it’s Greek.
Towards the end of the piece, he states “where Turkey suggested that it might join BRICS, that will inevitably be shelved at best.” Why?
Is Turkey expected to pay something to join BRICS. If Turkey was trying to join the NFL, I could see this currency crisis effecting that, as a new NFL owner is expected to pay the rest of the cartel hundreds of millions of dollars for the privlidge of joining the cartel. Thus, with the currency crisis in progress, I could understand Turkey failing to be able to make such a payment. But BRICS? Was Turkey expected to pay to join BRICS? Or were the other BRICS nations expecting to loot Turkey in trade and now they see they can’t so the deal is likely off? That sounds more like Wall Street than what I’ve heard about BRICS. But you can see why I was curious about this statement towards the end of the piece that had no explanation as to why?
And the last part, “shelved, at best.” What is meant by that? What situations can arise from Turkey talking to BRICS that can make having such a membership application being “shelved” is the best possible result? Does Russia tell prospective BRICS countries that if their application falls through and they don’t become members, then to quote Reagan, bombing begins in five minutes?
From here, it seems like if BRICS were able to step in and save Turkey from its current Economic Warfare attack from which is now under, then BRICS would be very popular in the rest of the world and there would be a line outside the next meeting hall of countries waiting to apply to join. Seems like for most of the world, an economic grouping that could help rescue countries under attack from Washington politics and wall street currency speculators would be very welcome and popular. I’m not sure BRICS at this time has the extra resources to completely do that, but even partly-useful sybolic efforts would provide good PR, thus BRICS might see such a situation as an opportunity instead of a problem.
The reason that I wrote that Turkey’s plan to join BRICS would be ‘shelved at best’ is that it will have its hands full trying to recover from the economic situation that it is in, and will remain relatively weak economically for some years to come. So the other BRICS members may not be pressing for an extra member that does not do much to strengthen the grouping. In addition, both Brazil and South Africa are not doing very well economically at the moment. Further than that, important aspects of Indian monetary policy were actually designed in coordination with various US banks and ‘philanthropic’ NGOs and in my view are not in the interests of ordinary Indian citizens, giving Western financial institutions too much power. So BRICS is not as internally coherent as it may appear.
Seems like there are two elephants in the room that go unmentioned in this analysis.
—— We know there was collusion before the last US elections, but it was the wrong countries. Meetings between the Trump campaign and representatives of MBS and Netanyahu have been reported. And they’ve gotten what they’ve wanted as Trump has lurched head on into putting America into both the Israeli-Arab conflict and the Shite-Sunni schism conflict. The most important thing on Trump’s agenda would appear to be Iran sanctions. Turkey and Iran have recently announced that Turkey would continue to trade with Iran. Trump has been throwing out threats to intimidate countries into line. Turkey is vulnerable due to the last decade of attracting foreign debt. Is it a big surprise that Turkey has a currency crisis soon there after? Doesn’t it sound like the GawdFather picked a vulnerable target to make an example?
—– Any big moves in currency almost always are later revealed to have had major players in currency markets working to drive down currencies. This is how they make their money. They can only make money when a market moves a lot in one direction. It doesn’t matter if its up or down. If you can bet that it will go down and then have enough clout on the currency markets of a big speculator and thus you can move to make it go down, then all of that snowballs down the hill and those bets that the currency was going to drop pay off big time and everyone gets bonuses and hookers and big smiles from the board of directors at the next quarterly review.
The last think I want to see on this blog is a link to the Guardian.
This analysis is based on a lot of assumptions backed by nothing but western propaganda.
The Guardian,The New York Times,Washington Post & the rest of the western press,all of them,cannot survive without the influx of zio-fake money.the people working inside these outlets have to make a living:put food on the table,pay the mortgage,the bills,the kids’ school,etc.,etc.the whole western civilisation is at accelerated slide.you give them the power of money-supply,accept the chains of their rewarding!
I spend a lot of my time criticizing the Guardian. In fact it has become an addiction that I should give up. I have being doing it regularly by email to the editor or individual journalists about two or three times a week, since the coup in Ukraine in 2014. Nothing of these criticisms has ever been published. The lies and deliberate distortions in that newspaper are sickening but sometimes the economics writers provide a reasonable analysis, and that was a convenient way to make points that I would have made myself.
I do not agree with their conclusion that a visit from the IMF is inevitable, and if the currency swaps with Russia and China can be made quickly enough that should ease the situation. But Trump wants to target Iran indirectly, and he wants that pastor released immediately. I expect him to escalate the sanctions soon.
Hope Lavrov does get some sense back into Turkey with all they are doing in Idlib region which seems to me to be going against the SAA…reports over the last few days regarding Turkey funding and supporting some kind of rebel reformation…extra watchtowers to preserve the current situation there …..note usa sending another regular supply convoy of 250 trucks etc to SDF east of Euphrates………
An excellent write-up!
I remember not so long ago when everyone was praising Erdogan for his fantastic stewardship of the Turkish economy. What a joke. It was just plain old debt-fuelled consumption. I am surprised Erdogan stuck around for this long and didn’t have a fall guy take the blame for this mess. But I guess he thought the spoils of the Syria war were going to bail him out. And of course being addicted to power doesn’t help..
US driving Turkey to quit NATO, boost business with Russia & China – investment guru Marc Faber
“Turkey has some leverage regarding the recent tension between Washington and Ankara, he said. “This is the Trump card that Turkey have – NATO. NATO has significant bases in Turkey. In the long run basically Turkey has two options; it can be closer to Europe and stay in NATO, or it could join the Shanghai cooperation.”
“That would imply that Turkey abandoned or have less relationships with the West and more relationships with Russia and China. This is a possibility that [Turkish President Recep Tayyip] Erdogan has. I think Trump doesn’t realize that this option is very realistic.”
Faber noted that after the harsh sell-off that hit the Turkish markets, now is a good time to invest in the country. “People always say they would like to buy low and sell high. Turkish stocks are valued in US dollars. Now it’s in buying range. I think I will buy some Turkish stocks, ETF’s [Exchange Traded Funds]. I own some [Turkish] bonds. It’s not the huge portion of my portfolio but yes I own some Turkish debts. I think it’s the time to buy Turkish assets,” Faber said.”
I don’t think bernhard or the zionazi-gays at the guardian would approve of such an outlook…
Nor this development:
In Russia’s Footsteps? Turkey Dumps US Sovereign Debt as Political Rift Deepens
“In June 2018, Turkey significantly decreased its portion of US sovereign debt, having reduced its portfolio from $32.6 billion to $28.8 billion, according to the US Treasury report. The trend in reducing US debt owned by Ankara started in November 2017, when the country held $61.2 billion worth of US debt.
Earlier the US Treasury reported that Russia had left the list of the biggest shareholders of US sovereign debt, having dumped 84% or $81 billion worth US treasury notes between March and May 2018. However the drop stopped at $14.9 billion in May and Russia hasn’t bought or sold US debt since then.
So far, the three biggest holders of US sovereign debt are China with $1.18 trillion, Japan with $1.03 trillion and Brazil with $300 billion.”
There is no crisis, only an illusion that a ratio of one fiat currency to another has some significance. It doesn’t. If lira buys today same amount of bread and milk as it did yesterday (and it does), there is no crisis.
Unless you’re an American, and an increase of foreign countries who won’t or can’t use your dollar in trade means that all those dollars will be coming home sooner or later, and the inflation they will cause will make Argentina’s 12000% like a walk in the park.
I agree completely. I am from a cotton mill town in Northern England, and first went to Italy – Diano Marina on a bus in 1963. That was my first experience of Italian Lira. Diano Marina is still there, and I am sure, I can still buy a litre of milk for much the same value 55 years later, as I could when I was 10 years old. It’s the cost of a litre of milk.
Much the same applies throughout much of the world, I have visited – Greece, Turkey, India…etc etc..
The cost of a pint of milk is much the same, though sometimes because of inflation, I have found the need to use lots of paper banknotes. I found rural parts of India particularly interesting, because I was trying to pay 100 times too much, for coconut milk – and he would not accept my payment of the equivalent of £1 because it was far too much. All he wanted was the equivalent of 1 penny. Eventually we understood.
Such people are wonderful, and we feel graced in their presence
Argentina´s inflation is around 20 – 30 % per year. I suppose you mean Venezuela. Go have a look at a map. Venezuela is a country east from Colombia (with O, not with U, Columbia is in the USA). Argentina is south of Paraguay and Bolivia (which is not close neither to Papua New Guinea nor to Gabon)
Unfortunately, it seems Turks have taken out a lot of loans in dollars and euros – seduced by low interest rates. As those loans mature it will take many more lira to repay; or the likelihood is default – making future loans difficuly/costly.
Turkey gambled, and like a gambling addict, went overboard and lost it all. Yet is still adamant on staying in Syria, one way or another. Even when the winds of an all out insurgency against Turkish troops in Syria’s north are seeming to be gathering speed. Arab, Assyrian and Kurdish tribes are making noise and they are threatening.
Turkey, along with Qatar, wanted an oil and gas pipeline system running through Syria, so they, along with Saudi Arabia, Israel (who was going to get a branch-off pipeline/s) and the U.S. funded and supported an invasion and all out war on Syria, but they lost.
Turkey also meddled/is meddling heavily , along with Qatar, in war-torn and destabilized Libya. They are supporting different sides to ensure that Libya’s internal bickering and militant attacks on one another continue for the unforeseeable future. You see, Qatar is a financial crutch for Turkey, and Turkey backs up the Qatari royals from Saudi / UAE attempts at subversion. Qatar is the world current leading supplier of natural gas. Libya also happens to have very good quality massive reservoirs of the stuff, and can alone, supply Europe and take care of some Asian needs , all at the same time. Qatar feels threatened by a strong, stable Libya, who would squeeze it out of a lot of global market share.
The Chinese , before the Libyan 2011 Revolution against Gaddafi, were approaching Libya, who they wanted to make a pivotal point in the maritime Silk Roads. There is word Gaddafi wanted to jump on board with China, head first, and may have been the reason for his railroading and demise.
So now, the Libyan people languish, in unstable turmoil, insecurity and a fallen, failed state with non existent institutions, with militias roaming around and power plays of many opportunists who are financially backed by Turkey and Qatar, while other groups are supported by Saudi Arabia, UAE and Egypt.
As far as what the Turks have done to Syria, there will be blowback, and Turkey has much to lose. If it decides to dig in its heels in Syria, it will come out of a bloody insurgency and armed conflict with the Syrian Arab Army and its allies and auxiliaries.
Once the Turks are taken care of, attention will quickly turn to U.S. , British and French forces and their little bases here and there. Basically being saved from annihilation by non other than Mr. Khamenei himself. who for whatever reason, has decided the time has not come yet, just not yet. Also, the Iraqi PMU’s ( Popular Mobilization Units), basically the Iraqi Army, are strategically placed around Al-Tanf U.S./Jordanian military base, and along the Iraqi-Syrian border. It is here that the coalition, U.S. et al are surrounded, along with the troublesome SDF Kurds, in a giant double envelopment. Because they hold the east, and on the western side of the Euphrates are the SAA, NDF, Hezbollah, IRGC, 25-30 thousand Afghan volunteers, many , many Chechen fighters sent by Mr. Khadyrov, and under the Russian MoD.
Some thoughts, Cheers, Salam.
Economics is not my strongpoint. Reading economists is to me a better solution for insomnia than prescription sleeping pills. That said, the present financial system is the biggest conspiracy in plain sight. The system is always rigged for the elites – the golden rule – those with the gold make the rules. But these days it’s a fiat currency system with the dollar as the world’s reserve currency. One might have noticed that during the last Greater Financial Crisis (2008) the US Federal Reserve just created 10s of trillions of dollars on its digital accounting and called it Quantitive Easing – nullifying the Austrian economist school’s prediction of a deflationary conflagration. The trillions of dollars of unpayable debt (all those dollars going to money heaven) saved the world from the usual inflation that would have resulted in most circumstances.
This creation of dollars is the financial systems power – the power of debt creation. They used this debt power to destroy the Eastern European communist economies after the fall of the Soviet Union (those Warsaw Pact countries losing their energy subsidies from the SU) Hence the common saying there “Everything they told us about communism was a lie, Unfortunately, everything they told us about capitalism was true.” So the West was able to buy up real economic resources for cents on the dollar or Euro. Remember how in the 70’s the US used its financial power to make the Chilean economy “scream” when it elected somebody (Allende) that the US didn’t like.
Now Turkey has fallen afoul of the US – so the financial system is using Turkey’s using debt to grow its economy against it. Dollar or Euro denominated debt came with lower interest rates than Turkish lira denominated debt. Now almost overnight the debt denominated in dollars has increased 17 % and 35% this year. Iceland survived because it had its own currency and refused to make its taxpayers pay the debt incurred by its private banks. So far Turkey is doing a lot better than Venezuela at using what financial tools it has available to it. Whether it can continue to resist, time will tell.
Obviously, Turkey being part of NATO was a result of the Cold War. Before that Turkey (in the form of the Ottoman Empire) was an enemy of Europe – Attaturk did move Turkey into the 20th century with his emphasis on a secular government and empowering education for all. There is a lot to be said for general literacy and the emancipation of women.Creating more equal opportunity for everybody is win-win.. As is still true in many places, people living in cities have more in common with each other than they do with their compatriots living in the countryside. From what I read this is true in Turkey. A sizable portion of the population wanted to be like Europe in its more enlightened aspects. it is now apparent that Europe was never going to allow Turkey to join it.
In Turkey, the military had an out sized amount of power – whenever the politicians got out of hand, it would overthrow the government. It appears that Erdogan has dulled the military’s power to the extent that he withstood the last coup attempt.
Yes, the economic systems seem to be unnecessarily complex, I’m not sure whether that’s by design or naturally occurring.Well, if all else fails people can always go back to barter, only form of transaction more solid than precious metals.
One issue that must be addressed is how much of Turkey’s financial instability is actually caused by America’s covert financial/economic warfare against that nation.
To believe that these economic disruptions are simply the workings of the “free market” is naive at best or dishonest at honest.
Behind the so-called “Invisible Hand of the Market” lies the Invisible Fist of the American Empire.
The Americans could be trying to destabilize Turkey’s financial system as punishment for the “crime” of Turkey defying the American Empire on a whole host of geopolitical/military issues like the purchase of Russian S-400 missile defense systems or its broader alignment with Russia, Iran, China, and broader Eurasian integration process.
For the (Anglo) Americans, this last issue of Eurasian integration is the geopolitical equivalent of waving a red cape in front of a charging bull, as it can be counted on to send them into a frothing, rabid hissy fit.
As Aly-Khan Satchu, financial analyst at Rich Management, has put it the “US dollar has been weaponised – either deliberately or by design” (is there a difference?), adding that the “dollar is basically knee-capping countries”, warning that other countries will face the same treatment “if they continue to pursue the policies that Erdogan is seeking to pursue”.
Trump’s attack on the lira – a new financial war on the Global South
great artcle – a topic that is interesting but not down my alley of expertise – so its welcome and seems very logical and legit – thanks to Gary Littlejohn for comprehensible writing.