Armstrong Economics Blog/Turkey
Re-Posted Aug 12, 2018 by Martin Armstrong
Turkey has little hope of coming out of this in one piece. The pretend President-Dictator, Tayyip Erdogan, has come out and denied on Saturday that Turkey is in a currency crisis. Exactly how he can even say that is shocking. Nevertheless, he called a 25% drop in the currency a plunge that is just ‘fluctuations’ that have nothing to do with economic fundamentals. He blamed the United States calling the collapse in the currency ‘missiles’ of an economic war waged against Turkey. Trump in raising the tariffs against Turkey is understandable since the currency declined and that would make their exports cheaper. However, he is stepping in the wrong direction here for the collapse in the currency reflects the collapse in the CONFIDENCE with regard to Erdogan.
We are looking at the usual response of a dictator in trouble. Blame someone else and that is ALWAYS external. What comes next is a break with the West and an alignment with the East. He is NOT about to surrender power NOR will he accept blame for the economic conditions in Turkey. His power is all that matters and the people are always wrong in his mind.
This past week was a Panic Cycle and this should start to subside a little but this is hardly over. Turkey is in serious economic trouble and Erdogan will blame the United States and Europe – never himself. I have warned before that NATO should have pulled all missiles out of Turkey. That is rapidly approaching the point of no return.