5 ms·

M2 increased 65% YoY, maybe the should cut public spending to reduce their deficit and stop the money printer instead... Or better: Close the central bank beca

by aeyes 3y ago

M2 increased 65% YoY, maybe the should cut public spending to reduce their deficit and stop the money printer instead... Or better: Close the central bank because politicians abuse it to spend money they don't have.

AlexandrB 3y ago
What does M2 have to do with public spending? Most of that money was created by private banks with private loans. Edit: It's also a little hard to stop spending money when you're dealing with the fallout of this: https://en.wikipedia.org/wiki/2023_Turkey–Syria_earthquakes https://en.wikipedia.org/wiki/2023_Turkey–Syria_earthquakes > The confirmed death toll stood at 59,259: 50,783 in Turkey and 8,476 in Syria. It is the deadliest earthquake in what is now present-day Turkey since the 526 Antioch earthquake and the deadliest natural disaster in its modern history.
- qwebfdzsh 3y ago
  > the deadliest natural disaster in its modern history. Wasn't the 2004 tsunami deadlier?
  - gpderetta 3y ago
    in Turkey (its) modern history.
  - hermitdev 3y ago
    > Wasn't the 2004 tsunami deadlier? What tsunami hit Turkey in 2004? from GP, emphasis mine: > > the deadliest natural disaster in _its_ modern history. edit: formatting
- nvm0n2 3y ago
  It has a multiplier effect. Government wants to spend money without raising it in taxes, forces the central bank to "loan" it money which it does via "printing" (increasing the balance of the govt at the CB accounts). The government spends the money on salaries and pensions which is then deposited into banks, which use those deposits to justify even more lending.
mrtksn 3y ago
Turkey is odd, everyone over 40 has retired and everyone below 30 is a student. About %8 of the whole population is enrolled in a higher education institution. The labor participation rate is among the lowest, although increasing. Many of the students and retirees are in employment as the life became harder, also the women who traditionally used to be housewives are getting close to western levels of employment. The “everyone above 40 is retired” is not exaggerated, it’s due to some populist policies in The 90s but it spilled over once again last year when Erdoğan caved and granted right for retirement after 20 years of working(many people have retired at 38, 18 + 20). Turkey is in a deep trouble and the central bank won’t be able to do much. On the other hand, its location is very favorable and the Turkish politicians are masters of milking it. Also, the population is still young and being close to EU and even a candidate state with deeply integrated economy, Turkey has a great potential to actually make this system sustainable. Also, the country is an engineering powerhouse as you might have noticed with its drones and other weapons and multiple tech Unicorns. But at the same time its politics have become more and more Islamic as the population becomes more and more secular. So yeah, overall Turkey is a weird place. Lots of troubles and lots of opportunities and IMHO not easy to explain with western mental models. However, as a someone who lived in Turkey on and off, I can tell you that the country’s life quality has been deteriorating steadily and quickly for the last 10 years without a break. 90s Eastern Europe vibes.
- JumpCrisscross 3y ago
  > as the population becomes more and more secular Source? (Not contesting. Just curious.)
  - mrtksn 3y ago
    Volkat Ertit is one of the popular sociologists arguing about it. Here is an article: https://www.al-monitor.com/originals/2015/03/turkey-is-getting-more-secular.html https://www.al-monitor.com/originals/2015/03/turkey-is-getti... You can also find videos of him explaining his findings in more details and he probably has books on it. It's also a common theme among the islamist, they keep complaining that significant number of kids in islamic schools are actually not muslim(but theists or agnostic or something of this sort) and demand that "someone should do something". However the more widespread theme is that lots of people are becoming "spiritual" instead of muslims or straight out atheists. They live secular lives, only say that they believe in Allah. Here is an example, a very popular Turkish influencer who came out of an imam-hatip school: https://www.instagram.com/lucifermichaelson/ https://www.instagram.com/lucifermichaelson/ Does he look like an islamist to you? He is pretty much banking on the Andrew Tate and Dan Bilzerian style when drops some verses from the koran every now and then. He will say some verse from some holly text about the beauty of the women when coming out of the pool with few models in it. It's a very widespread phenomenon these days to be "muslim" in the sense that you don't eat pork and wear a scarf or something and then live completely secular life otherwise. The traditional seculars are mocking this new affluential demographic as "süslüman", which is a word play on "süslü"(fancy, with a lot of ornaments ) and "müslüman" (muslim).
cpursley 3y ago
This is basically what president Milei of Argentina has promised to do.
pjc50 3y ago
Some people were arguing about bank-created money, so I went and looked up M1, and .. yeah. https://www.statista.com/statistics/1389407/turkey-money-supply-m1/ https://www.statista.com/statistics/1389407/turkey-money-sup... This is a classic Zimbabwe-style money printing disaster. The other cause of inflation - devaluation against the dollar caused by weak trade - doesn't help, but the government money printing is really making it worse. https://www.euronews.com/2022/11/09/everything-is-overheating-why-is-turkeys-economy-in-such-a-mess https://www.euronews.com/2022/11/09/everything-is-overheatin... (not all inflation is money printing; analysis applies to Turkey here and should not be generalized blindly)
- throw0101d 3y ago
  > This is a classic Zimbabwe-style money printing disaster. Have you ever asked why Zimbabwe started printing money in the first place? * https://www.huffpost.com/entry/another-look-at-the-zimba_b_790074 https://www.huffpost.com/entry/another-look-at-the-zimba_b_7... * https://clintballinger.com/2020/04/30/airplane-crashes-arent-hyperlandings-notes-on-zimbabwe/ https://clintballinger.com/2020/04/30/airplane-crashes-arent...
  - Log_out_ 3y ago
    It's because the evil NATO supported a leftist protection canvas revolutionary that turned out to be a sociopathic dictator, so they had to gather colonial atrocities to calm the bad consciousness spirits ever since?
throw0101d 3y ago
> M2 increased 65% YoY, maybe the should cut public spending to reduce their deficit and stop the money printer instead... It's always interesting that people talk about money supply/printing as the cause of inflation, but don't go one step further as to the cause of the 'money printing' as well. * https://www.pragcap.com/hyperinflation-its-more-than-just-a-monetary-phenomenon/ https://www.pragcap.com/hyperinflation-its-more-than-just-a-... * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1799102 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1799102 * https://www.pragcap.com/understanding-hyperinflation/ https://www.pragcap.com/understanding-hyperinflation/ Japan has had a constantly expanding M2, and yet its inflation rate has not only been low, but negative on more than one occasion: * https://fred.stlouisfed.org/graph/?g=PA7P https://fred.stlouisfed.org/graph/?g=PA7P
- aeyes 3y ago
  I did. One of the primary causes of inflation is running a deficit for decades which is financed by the money printer. As a consequence, the demand for Turkish debt is decreasing because it is getting riskier and riskier. And with this the value of the lira is going down because there is lower and lower genuine demand for the currency. And when the value of the currency goes towards 0, the prices are going towards: infinity. Why do you think the government is trying to stop dollarization? Nobody wants lira. Japan is an outlier and I wouldn't cite it as a general example because it is the only example. But there are hundreds of examples of inflation caused by expanding money supply.
- nvm0n2 3y ago
  Inflation rates as quoted by governments aren't always informative because they tend to exclude many prices that are the most affected by money printing e.g. equities.

by aeyes 3y ago

AlexandrB 3y ago

What does M2 have to do with public spending? Most of that money was created by private banks with private loans. Edit: It's also a little hard to stop spending money when you're dealing with the fallout of this: https://en.wikipedia.org/wiki/2023_Turkey–Syria_earthquakes https://en.wikipedia.org/wiki/2023_Turkey–Syria_earthquakes > The confirmed death toll stood at 59,259: 50,783 in Turkey and 8,476 in Syria. It is the deadliest earthquake in what is now present-day Turkey since the 526 Antioch earthquake and the deadliest natural disaster in its modern history.

qwebfdzsh 3y ago
> the deadliest natural disaster in its modern history. Wasn't the 2004 tsunami deadlier?
- gpderetta 3y ago
  in Turkey (its) modern history.
- hermitdev 3y ago
  > Wasn't the 2004 tsunami deadlier? What tsunami hit Turkey in 2004? from GP, emphasis mine: > > the deadliest natural disaster in _its_ modern history. edit: formatting
nvm0n2 3y ago
It has a multiplier effect. Government wants to spend money without raising it in taxes, forces the central bank to "loan" it money which it does via "printing" (increasing the balance of the govt at the CB accounts). The government spends the money on salaries and pensions which is then deposited into banks, which use those deposits to justify even more lending.

mrtksn 3y ago

Turkey is odd, everyone over 40 has retired and everyone below 30 is a student. About %8 of the whole population is enrolled in a higher education institution. The labor participation rate is among the lowest, although increasing. Many of the students and retirees are in employment as the life became harder, also the women who traditionally used to be housewives are getting close to western levels of employment. The “everyone above 40 is retired” is not exaggerated, it’s due to some populist policies in The 90s but it spilled over once again last year when Erdoğan caved and granted right for retirement after 20 years of working(many people have retired at 38, 18 + 20). Turkey is in a deep trouble and the central bank won’t be able to do much. On the other hand, its location is very favorable and the Turkish politicians are masters of milking it. Also, the population is still young and being close to EU and even a candidate state with deeply integrated economy, Turkey has a great potential to actually make this system sustainable. Also, the country is an engineering powerhouse as you might have noticed with its drones and other weapons and multiple tech Unicorns. But at the same time its politics have become more and more Islamic as the population becomes more and more secular. So yeah, overall Turkey is a weird place. Lots of troubles and lots of opportunities and IMHO not easy to explain with western mental models. However, as a someone who lived in Turkey on and off, I can tell you that the country’s life quality has been deteriorating steadily and quickly for the last 10 years without a break. 90s Eastern Europe vibes.

JumpCrisscross 3y ago
> as the population becomes more and more secular Source? (Not contesting. Just curious.)
- mrtksn 3y ago
  Volkat Ertit is one of the popular sociologists arguing about it. Here is an article: https://www.al-monitor.com/originals/2015/03/turkey-is-getting-more-secular.html https://www.al-monitor.com/originals/2015/03/turkey-is-getti... You can also find videos of him explaining his findings in more details and he probably has books on it. It's also a common theme among the islamist, they keep complaining that significant number of kids in islamic schools are actually not muslim(but theists or agnostic or something of this sort) and demand that "someone should do something". However the more widespread theme is that lots of people are becoming "spiritual" instead of muslims or straight out atheists. They live secular lives, only say that they believe in Allah. Here is an example, a very popular Turkish influencer who came out of an imam-hatip school: https://www.instagram.com/lucifermichaelson/ https://www.instagram.com/lucifermichaelson/ Does he look like an islamist to you? He is pretty much banking on the Andrew Tate and Dan Bilzerian style when drops some verses from the koran every now and then. He will say some verse from some holly text about the beauty of the women when coming out of the pool with few models in it. It's a very widespread phenomenon these days to be "muslim" in the sense that you don't eat pork and wear a scarf or something and then live completely secular life otherwise. The traditional seculars are mocking this new affluential demographic as "süslüman", which is a word play on "süslü"(fancy, with a lot of ornaments ) and "müslüman" (muslim).

cpursley 3y ago

This is basically what president Milei of Argentina has promised to do.

pjc50 3y ago

Some people were arguing about bank-created money, so I went and looked up M1, and .. yeah. https://www.statista.com/statistics/1389407/turkey-money-supply-m1/ https://www.statista.com/statistics/1389407/turkey-money-sup... This is a classic Zimbabwe-style money printing disaster. The other cause of inflation - devaluation against the dollar caused by weak trade - doesn't help, but the government money printing is really making it worse. https://www.euronews.com/2022/11/09/everything-is-overheating-why-is-turkeys-economy-in-such-a-mess https://www.euronews.com/2022/11/09/everything-is-overheatin... (not all inflation is money printing; analysis applies to Turkey here and should not be generalized blindly)

throw0101d 3y ago
> This is a classic Zimbabwe-style money printing disaster. Have you ever asked why Zimbabwe started printing money in the first place? * https://www.huffpost.com/entry/another-look-at-the-zimba_b_790074 https://www.huffpost.com/entry/another-look-at-the-zimba_b_7... * https://clintballinger.com/2020/04/30/airplane-crashes-arent-hyperlandings-notes-on-zimbabwe/ https://clintballinger.com/2020/04/30/airplane-crashes-arent...
- Log_out_ 3y ago
  It's because the evil NATO supported a leftist protection canvas revolutionary that turned out to be a sociopathic dictator, so they had to gather colonial atrocities to calm the bad consciousness spirits ever since?

throw0101d 3y ago

> M2 increased 65% YoY, maybe the should cut public spending to reduce their deficit and stop the money printer instead... It's always interesting that people talk about money supply/printing as the cause of inflation, but don't go one step further as to the cause of the 'money printing' as well. * https://www.pragcap.com/hyperinflation-its-more-than-just-a-monetary-phenomenon/ https://www.pragcap.com/hyperinflation-its-more-than-just-a-... * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1799102 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1799102 * https://www.pragcap.com/understanding-hyperinflation/ https://www.pragcap.com/understanding-hyperinflation/ Japan has had a constantly expanding M2, and yet its inflation rate has not only been low, but negative on more than one occasion: * https://fred.stlouisfed.org/graph/?g=PA7P https://fred.stlouisfed.org/graph/?g=PA7P

aeyes 3y ago
I did. One of the primary causes of inflation is running a deficit for decades which is financed by the money printer. As a consequence, the demand for Turkish debt is decreasing because it is getting riskier and riskier. And with this the value of the lira is going down because there is lower and lower genuine demand for the currency. And when the value of the currency goes towards 0, the prices are going towards: infinity. Why do you think the government is trying to stop dollarization? Nobody wants lira. Japan is an outlier and I wouldn't cite it as a general example because it is the only example. But there are hundreds of examples of inflation caused by expanding money supply.
nvm0n2 3y ago
Inflation rates as quoted by governments aren't always informative because they tend to exclude many prices that are the most affected by money printing e.g. equities.