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Turkey’s currency plunges after the head of the country’s central bank is fired
- aritmo 6y agoAlternative: https://archive.is/r6mTZ https://archive.is/r6mTZ
- fueloil 6y agoErdogan and his political party have been draining all the money reserve of Turkey since 17 years.
- medium_burrito 6y agoYeah, FT has been harping on this for a while now. If you have reserves you can prop up your currency, but the clown world can only last so long until you run out of money.
- ku-man 6y agoYes, they have been draining the money and pumping up non-stop islamism.
- iso1631 6y agoIt's currently 12.7c Back in November it was 11.7c The bigger story is that back in 2011 it was 65 cents.
- klmadfejno 6y agoThat's ~10%. The drop from 65 cents was ~80%, but this one is still noteworthy.
- iso1631 6y agoIt's increased from 11.7 to 14.3 then dropped to 12.6 over the last 6 months, the bigger story is the long term devaluing over the last decade compared with the dollar
- huseyinkeles 6y agoFTFY: Fired Central Bank Chief for the 3rd time in 20 months. [0] Turkey had 4 different Central Bank Chiefs in the last 20 months, all fired by Erdogan. This one only lasted ~130 days. [0] - https://en.wikipedia.org/wiki/List_of_Governors_of_the_Central_Bank_of_the_Republic_of_Turkey https://en.wikipedia.org/wiki/List_of_Governors_of_the_Centr...
- adenner 6y agoAt this point, if offered the job, why would anyone take it?
- praptak 6y agoIt seems to me like a bumper job. You get the signing bonus, take the blame and probably also get a less visible cushy job afterwards.
- ce4 6y agoYou wouldn't want to turn down such an order, er generous offer from Erdogan, would you?
- huseyinkeles 6y agoYeah, it's not like you have any choice when such an offer comes from the divine being Erdogan. He has absolute power on anything and everything, like deciding who's gonna be the next rector of a top university or assigning his son in law as the minister of economy etc. Source: I used to live in Turkey until I decided I can't take this shit anymore and immigrated to Western Europe.
- MrPatan 6y agoFor the money
- aerodog 6y agoLower interest rates in the US to spur growth: Smart! Lower interest rates in Turkey to spur growth: Stupid!
- klmadfejno 6y agoPeople want US dollars a lot more than they want Turkish Lira. I don't agree with US monetary policy but to imply they're the same situation is dumb.
- psychlops 6y ago> When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
- klmadfejno 6y agoI think we're all adult enough to tolerate my level of defamation. The example of 1+1=3 implies an honest mistake. If someone is asserting that 1+1=3, calling it a dumb argument is accurate and appropriate. "Inappropriate" would convey that the comment about monetary policy was not good. "Dumb" conveys that it is both inappropriate and belligerent.
- AnimalMuppet 6y agoWhether "we're all adult enough" isn't the point. The point is that defamation (even your level of defamation) is against the site guidelines.
- klmadfejno 6y agoAnd I think the point is obtuse and pedantic beyond the intended scope of the guidelines, so I don't care. No name calling doesn't mean you can't assert low intellectual merit of arguments.
- 6y ago
- superkuh 6y agoA fiat currency's value mostly stems from the perception of if the country has the military/political might to enforce it's contracts. Given that Turkey's military is a significant force I doubt their currency will dip so low as to not be useful. That said, volitility for fiat currencies can get pretty high in these kind of situations. But even though the value is going down Turkey is still spending massive amounts of energy maintaining it's army to support the currency. That's the real signal to pay attention to. Individual economic policy administrators don't really matter since economic policy is mostly made up and irrelevant.
- psychlops 6y ago> A fiat currency's value mostly stems from the perception of if the country has the military/political might to enforce it's contracts. Bitcoin's energy consumption for its value now seems quite modest.
- JumpCrisscross 6y ago> fiat currency's value mostly stems from the perception of if the country has the military/political might to enforce it's contracts This is an unconventional theory. It does not have a good track record. Yes, having a monopoly on violence is a basic requirement for a functioning government. Its absence implies a failed state. Failed states aren't known for having useful currencies. But functioning states regularly trash their currencies.
- blueblisters 6y agoHuh? A fiat currency's value stems from a government's ability to repay sovereign debt and be responsible with the money supply. That's exactly why modern economies separate the treasury and the central bank - that system, however flawed, is the reason why investors are confident letting sovereigns borrow their money.
- Clewza313 6y agoThe army is kind of irrelevant here, because the Turkish government has a lamentable track record of printing money to pay the bills. The previous lira reached 1.3 million to the USD before they chopped off 6 zeroes (I once paid 6,500,000 lira for a kebab & a Coke at the airport), and the new one is rapidly heading the same way: https://en.wikipedia.org/wiki/Turkish_lira#/media/File:Euro_exchange_rate_to_TRY.svg https://en.wikipedia.org/wiki/Turkish_lira#/media/File:Euro_...
- ic0n0cl4st 6y agoYou will know Tayipp has given up when he appoints Bilal to this position.
- priteshp 6y agoThis perfectly explains one of the many bull cases for cryptocurrencies. 15% annual inflation robs the working class of wealth but they previously had no alternative. At least now they can store some of their assets in cryptocurrencies while the government continues to debase the purchasing power.
- DangerousPie 6y agoBecause cryptocurrencies are famously stable?
- anm89 6y agoFrom a supply perspective, yes.
- pjc50 6y agoThe supply of Tether, on the other hand, makes a nonsense of the BTC/USD/USDT exchange rate.
- AnimalMuppet 6y agoNobody[1] gives a rip about the stability of the supply. They care about the stability of the value. ----- [1] OK, almost nobody. For crypto to be widely used, it needs a much more stable value.
- anm89 6y agoMany people, my self included, care indirectly about the supply being limited, because they perceive that this will bode well for its value denominated in currencies which have supplies which aren't being tightly managed. I agree that in a vacuum nobody cares about the supply. I'm regards to the stability thing, bitcoin volatility has been steadily decreasing over time. It's still very young and has a lot of price discovery left to go. I personally believe its volatility profile will align with the normal range for commodities and currencies over the next let's say 20 years.
- 6y ago
- diego_moita 6y agoA funny pattern: quite often, "capitalists" welcome authoritarian rulers, expecting them to be "good for business", because they "make the trains run on time" and keep unions and environmentalists in check. However, in the long run, these rulers end up having their own agenda that turns out to be bad to businesses. Examples? * Brazil's Bolsonaro crashing the country's confidence and branding by shunning trade deals with EU, being hostile to trade partners (China, Arab countries) or interfering (Hugo Chavez-like) with the state oil company. * Trump and his disastrous handling of the pandemic. * Xi-Jiping and the CCP interference in AliPay and other conglomerates. * Erdogan's disastrous handling of Turkey's currency. Moral of the story: everyone loves their dictator until the moment the dictator is no longer "their". Frankenstein's monsters have this unpleasant side effect of turning against their creators.
- riffraff 6y agoI agree with what you're saying, but Erdogan has been prime minister for almost 20 years, and that can be properly considered "the long run". I don't think the same applies to Bolsonaro and Trump, who've only had one term, and while horrible leaders, have not (yet) managed to change the institutions which elected them (Erdogan headed 3 constitutional changes).
- donovanian 6y ago> "capitalists" welcome authoritarian rulers North Korea, Venezuela, China, Russia, Cuba, to a certain extent Mexico... I'm not sure you could find examples of more authoritarian societies that have a proliferation of mandates "for the greater good." Conformism is king!
- alperars 6y agoThe funny thing is former president offers his gratitude towards Erdoğan for dismissing him...