Turkey did not sell off its US Treasury holdings because Erdogan suddenly discovered some brilliant new economic strategy. This is what governments do when the pressure begins to rise and the walls start closing in. The latest TIC data showed Turkey’s long-term US Treasury holdings collapsed from roughly $11.1 billion in February to about $839 million in March. That is not normal portfolio management. That is a sign of stress.
I have warned that Turkey is one of the key geopolitical pressure points because it sits between East and West, Europe and Asia, NATO and the Islamic world. Everyone pretends Turkey is just another emerging market, but that is absurd. Turkey controls the Bosporus, it borders the Middle East, it has one of the largest militaries in NATO, and Erdogan has long tried to position himself as the leader of a revived Ottoman sphere. This is why Turkey matters far beyond the lira.
The Iran crisis has exposed the weakness. Turkey imports energy. When war sends energy prices higher, inflation returns immediately through the back door. Inflation is already above 32%, the central bank has held rates at 37%, and now the market is talking about rates going to 40%. That is not strength. That is a government fighting a currency crisis with interest rates while pretending everything is stable.
The debt crisis is not simply about government debt-to-GDP ratios. That is the nonsense economists use when they want to ignore capital flows. Turkey’s problem is external vulnerability, inflation, reserve pressure, foreign capital dependence, and the rising cost of rolling debt in a world where capital is no longer blindly funding everyone. ING estimated Turkey’s gross borrowing needs could rise more than 62% this year to TRY 6.382 trillion, driven by redemptions and higher debt costs. That is the debt crisis in motion.
Turkey sees the US and Israel as a joint entity now. As I repeatedly warned, nations do not buy the debt of their enemies. Turkey vehemently opposed Israel’s demolition of Gaza and it matters not that the US is a NATO “ally.” In an Eid holiday speech, Erdogan predicted that Turkey would rise as “one of the shining stars of the new era,” adding that the nation will restore peace to the region. “With defence and aerospace exports rising from $248 million to more than $10 billion, Türkiye is writing a rare success story in the world,” he added. Erdogan sees the conflict as an opportunity to achieve his long-standing dream of reviving the glory of the Ottoman Empire.
This is how sovereign debt crises begin. It is not one dramatic headline. It is a sequence. First the currency weakens. Then reserves are burned defending it. Then inflation returns. Then rates rise. Then the government must issue more debt at higher costs. Then foreign capital becomes nervous. Then the politicians blame speculators, foreigners, oil, war, or anyone except themselves.
Turkey selling Treasuries is part of the same global trend I have warned about. The world is no longer treating US debt as the unquestioned foundation of the monetary system. Foreign governments are looking at Washington, the war cycle, sanctions, deficits, and political instability, and they are beginning to diversify. Some are forced to sell because they need dollars. Others are selling because they no longer trust the system. Either way, the message is the same.
Turkey’s Treasury dump is another warning that the world monetary system is fracturing, and the fools in government still think they can borrow forever, manipulate rates forever, and drag the world into war without consequence.
Categories:Turkey
Congress is pushing nationwide year-round E15 gasoline because they are worried about fuel supply disruptions and soaring prices as the war cycle intensifies. They call it “consumer choice” and “energy independence,” but when you strip away the political marketing, what they are really doing is diluting the fuel supply because they are terrified of shortages and price spikes.
The House just passed H.R. 1346, the Nationwide Consumer and Fuel Retailer Choice Act, by a vote of 218-203. The bill would permanently allow year-round sales of E15 gasoline nationwide. E15 is gasoline blended with 15% ethanol instead of the standard 10%. Congress and the EPA are presenting this as some patriotic victory for farmers and consumers while pretending Americans are not noticing what is really taking place.
The government keeps saying E15 lowers prices at the pump. Of course, it does on paper. You are blending more ethanol into the fuel supply. Ethanol contains less energy per gallon than pure gasoline. That means your mileage declines and your tank empties faster. People end up buying more fuel more often while politicians brag that prices “fell” a few cents per gallon. Americans are paying more for less while Washington pretends this is economic progress.
The EPA openly admitted the purpose behind the emergency waivers was to “prevent disruption in America’s fuel supply” as the Iran war pushed energy markets into panic. They are not doing this because the economy is strong. They are doing this because they are worried about supply itself.
“President Trump is unleashing American Energy Dominance, and today’s action will directly lower prices at the pump and gives a clear demand signal to our domestic biofuels producers. Allowing the summer sale of E-15 will provide drivers more options at the pump, and deliver a bigger domestic market for American farmers,” said U.S. Secretary of Agriculture Brooke L. Rollins. The government is congratulating itself for putting lipstick on a pig. Trump spent years condemning Biden’s energy policies that led to elevated prices for different reasons. Washington does not want voters to look at an $ 8-per-gallon situation and suddenly realize that government policy has failed yet again because politicians continually act in their own self-interest while jeopardizing the entire country. The people always suffer when government instigates war. Quite unfortunate as Trump promised to keep America out of the Middle East, but somewhere along the way he morphed from a businessman into a politician. Human nature is consistent.
Governments dilute and stretch what they can at the beginning of a crisis. They lower standards quietly while telling the public everything is under control. You see it in currencies, banking, food quality, and now fuel. The objective is always the same: make a limited supply appear larger. Could this improve consumer sentiment regarding energy? People are still going to pay more at the pump. The end result is higher prices which equates to angry and fearful consumers. It is absolutely insulting for our overlords to question our intelligence in this manner. They genuinely believe we are too stupid to notice.
The EPA’s own regulatory structure restricted E15 during the summer months for years because higher volatility contributes to ozone and smog formation in hot temperatures. Suddenly now, in the middle of a geopolitical crisis and rising energy fears, all those concerns become “flexible.” Rules always change the moment governments become desperate.
This is why I have warned that inflation was never transitory. Once war enters the equation, inflation becomes structural because war attacks supply itself. You cannot print oil. You cannot print refining capacity. You cannot print stability in the Middle East. So instead governments begin blending, waiving, extending, subsidizing, and manipulating statistics while pretending they solved the problem.
The frightening part is that this is likely only the beginning. The government claims the measure is temporary, but in all likelihood, the measure will become a new norm that the public is forced to accept. Europe is already discussing energy controls openly. Once shortages deepen, politicians always shift from “consumer choice” to outright management of consumption itself.
Washington knows the energy situation is fragile. They cannot allow energy prices to reflect real scarcity because the debt structure would implode under the pressure. So instead they dilute the product and hope the public does not notice.
COMMENT: I love my country. What if Russia and Iran are coordinating an exacerbation of a two front war against “West”? Russia just warned embassies in Kiev to evacuate, signaling upcoming intensification. Iran just goaded US into firing missiles when MoU was near signing. Xi met with Putin right after Trump’s visit, and per news, Chinese and Iranian foreign ministries continue to communicate.
What if the plan was to exacerbate wars on two fronts, with Xi and the Chinese sharing insights gleaned from Trump’s visits? If so, they are playing Trump and hubris like a fiddle. I could have only come up with this theory because you have been pounding the table about this possibility first.
Can you share this, at least to get folks to have an open mind? To me, it’s not about Trump. I just don’t want us to be so foolish, and love him or hate him, there’s a overall reason why all of us would want to avoid any such foolishness?
JN
REPLY: I have expressed my concern, but it seems as if their eyes glaze over, and they simply think that they will win because they have the most sophisticated military. But we spend over $1 million to shoot down a $30,000 drone. To make matters worse, it takes years to replace what was already used against Iran. I have stated before that if I were on the opposite side of the table, I would use Iran to drain the resources, Russia then seriously attacks Ukraine, not just the Donbas, North Korea invades the South, and China invades Taiwan. There is no possible way to defend on four fronts.
Macron went to Xi BEFORE Trump and said the EU will NOT support Iran or Taiwan. So you saw Trump say after his meeting, he recommended the chip maker move to the USA. Trump is trying to cut his losses in Iran and strike a deal to justify exiting, while Israel has said none of the original goals were achieved, and they will act in their own self-interest.
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The Neocons are a threat not just to American National Security, but to the entire world. They start wars with NO exit strategy. They presume we will win and NEVER have any strategy whatsoever. In Iraq, they simply focused on removing Saddam. They had ZERO analysis or strategy for what came next.
People like Dick Cheney took us into Iraq with ZERO strategy. It was not a matter of weeks; it was 8 years. We saw the same flawed ideas with Vietnam.
Robert McNamara (1916 – 2009) was a leading Neocon who pushed the country into the Vietnam War. He was famous for saying, “I learned early on never to answer the question that is asked of you. Answer the question that you wish had been asked of you. And quite frankly, I follow that rule. It’s a very good rule.”
Before he died, he finally admitted that they were wrong, particularly in their assessment of Russia as a threat. The perception of Russia as a threat still dominates the agenda today. The propaganda that Putin is a KGB guy who wants to re-establish the Soviet Empire is absurd. In the 22 years that he has been in power, he has neither tried to re-establish communism nor has he sought to retake the old Soviet states like Poland, the Czech Republic, or even Ukraine. The same claims today about Russia are the very same ones that justified Vietnam. The Vietnam War lasted from November 1, 1955, to April 30, 1975, totaling approximately 19 years and 5 months.
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Iran has been Netanyahu’s war, and he suckered the USA into once again funding his endless agenda. He said the same thing about Iraq when he testified before Congress in 2002. This Iran war is a religious war for which there is no long-term solution. Israel and Iran will simply have to fight it out in a cage match, for nobody seems willing to live in peace.
Iranian leader Mojtaba Khamenei issued a message on May 26 calling for greater unity across the Muslim world against the United States and Israel, saying that the chants “Death to America” and “Death to Israel” will become the rallying slogans of Muslims and “the oppressed of the world.”
World War II (1942-1945) cost 84% on average budget annually. The Cold War Era (late 1980s) cost 28-30% annually. A preliminary assessment is that more than 50% of the National Debt has been used to fund Neocon wars, with the constant interest payments keeping the debt rolling. The latest projection just for the 55,000 American troops involved in Iran, with the future medical care and disability benefits for these veterans over the next 30 years, is projected to be a major driver of the potential $1 trillion total cost.
The official figure does not yet fully account for this replacement gap on weapons already used. Beyond direct government spending, the war has also imposed broader costs on the U.S. economy. Even UBER already costs are up about 25% on average. Nobody seems to understand that these endless wars raise the national debt, and then those in Congress raise taxes to pay for the escalating debt.
The conflict has disrupted global oil supplies, pushing the average price of gasoline in the U.S. to $4.23 per gallon in late April 2026, a 40% increase from before the war. Plus, diesel and jet fuel are impacting travel and fishing costs. This war will add significantly to the U.S. national debt, with costs not simply passed on to future generations of Americans; it will result in higher taxes, especially when Democrats get control.
To determine how long it will take for the U.S. national debt to double due to interest alone (i.e., with no new borrowing and no principal repayment), we can use the Rule of 72. The Rule of 72 is a simplified formula that estimates the number of years required to double an investment (or debt) at a fixed annual rate of return (or interest rate) of 5.1% will be 14 years. That is just the interest alone!
The real enemy of government is not Russia, China, Iran, or whoever is next. It is the Neocons and their endless wars with no STRATEGY and no intention of ever paying off any debt whatsoever. They are the real threat to the United States, and nobody even looks at this crisis.
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