So, this is what a Black Swan looks like in real-time ;) I can recall not even five years ago when $USDTRY was historically stable just below 2.00. It's possib

So, this is what a Black Swan looks like in real-time ;) I can recall not even five years ago when $USDTRY was historically stable just below 2.00. It's possible it will go to 8.00 very shortly. After winning re-election in June, US-Turkey relations became strained over Erdogan's consolidation of power. Including the appointment of his son-in-law as Finance Minister. High inflation and deficits should have triggered a raise in interest rates. Policy experts conjectured a looming threat of sanctions would compel action. But instead the Central Bank, under authoritarian control of the popular regime, wanted to implement its own brand of capital controls. The result is an historic devaluation. And risk of contagion spreading with highly levered European bank exposure. Looking at the raw economic numbers. Turkey's GDB is under $1T annually. And outstanding foreign denominated debt approx $500B. The scale is minuscule compared to China and the West. As global debt approaches $50T and rate of growth slows below the the rate at which interest on that debt accumulates. It is not out of the realm of possibility that what is happening in Turkey right now serves as a microcosm for what could happen around the globe. Populist backed government seizure of private capital on an unprecedented scale. There is no other way to interpret this than as a cautionary tale of the necessity of fiscal policy insulation from political winds of change.