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Turkey’s economic lie

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  • #1

    Turkey’s economic lie

    Turkey’s economic lie

    Op-ed: Turkey no economic powerhouse, Erdogan’s credit bubble will soon explode

    Guy Bechor

    Published: 09.15.11, 23:49 / Israel Opinion

    Some refer to him as “the Middle East’s new sultan in a neo-Ottoman empire” – yet the truth about Erdogan’s kingdom is utterly different. We are not facing an economic power, but rather, a state whose credit bubble will be exploding any moment now and bringing down its economy.

    The budget deficit of the collapsing Greece compared to its GDP stands at some 10%, and the world is alarmed. At the same time, Turkey’s deficit is at 9.5%, yet some members of the financial media describe the Turkish economy as a success story (for comparison’s sake, Israel’s deficit stands at some 3% and is expected to decline to 2% this year.)

    While Turkey’s economy grew by some 10% this year, this was merely the result of financial manipulation.

    So how does the system work? The banks in Erdogan’s Turkey handed out loans and mortgages to any seeker in recent years, offering very low interest rates; this was in fact a gift. As the interest rate was so low, Turkish citizens used more and more credit, mostly for consumption.

    And how did Turkey’s Central Bank finance this credit party? Via loans: Erdogan’s bank borrowed money in the world and handed it out to its citizens. However, Turkey’s deficit kept growing because of it, until it reached a scary 8% of GDP; by the end of the year the figure is expected to reach 10%.

    Turkey’s external debt doubled itself in the past 18 months, which were election campaign months. Only a small part of the deficit (15%) was financed by foreign investment. The rest constitutes immense external debts.

    Now it’s clear that Erdogan’s regime bought the voters in the recent elections. Most of the Turkish public elected him not because of Islamic sentiments, but rather, because he handed out low-interest loans to everyone. I will provide you with cheap money so you can become addicted to shopping, and you shall elect me.


    The Israel diversion

    This created Turkey’s credit bubble, which may explode any day now, because the date for returning the loans approaches. Will the Saudis help Erdogan as he hopes? This is highly doubtful. Nobody is willing to pay for attacks on Israel, and the West is annoyed by Erdogan’s thuggery. Why should they help him?

    Moreover, Turkey’s unemployment rate is 13% and the local currency continues to plummet vis-à-vis the dollar – it reached its lowest levels since the 2009 global crisis. With a weak currency and with a stock exchange that lost some 40% of its value in dollars in the last six months, Erdogan wants to be the Middle East’s ruler?

    Once the bubble explodes, the score with Erdogan will be settled, by the journalists his government ordered to arrest, by army officers charged with imaginary accusations, by the restrained scientists, the politicians, and mostly the general public, which shall be facing an economic disaster.

    And this is where Israel comes into the picture. Why talk about the approaching economic catastrophe? Why talk about this disgrace, when it’s better to create an artificial crisis vis-à-vis Israel, a spin that the whole world will be talking about instead of talking about the sinking Turkey? After all, the Marmara raid happened more than a year ago, why did it emerge again now? Is it only because of the Palmer Report?

    We shall wait a few more months, and then we shall see what really happens in the new sultan’s kingdom.

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  • #2
    Re: Turkey’s economic lie

    Thank you for the post. A few days ago Vrej1915 posted an article which mentioned the Turkish current account deficit. I have been reading into it, and there is a lot there which is not given alot of attention by the media.

    Comment

    • #3
      Re: Turkey’s economic lie

      Originally posted by Mher View Post
      Thank you for the post. A few days ago Vrej1915 posted an article which mentioned the Turkish current account deficit. I have been reading into it, and there is a lot there which is not given alot of attention by the media.
      This report is actually a load of racist Israeli propaganda. Does the author think that his lies become truth simply because it is a xxx who is saying it - or maybe he is counting on the ignorance of his audience about what the Turkish economy is really like, or on people placing wish-futhfillment over reality.

      "local currency continues to plummet vis-à-vis the dollar" erm - the reality is that the dollar has plummeted in value (against all curencies including the Turkish lira), and the Turkish lira is now so strong that it is seen by Turkish industrialists as being vastly overvalued and placing Turkish exports at risk. The Turkish lira has been increasing slowly but steadily in value in real terms against major currencies since the late-1990s. It has dropped in value very slightly in the last few months. The pound was worth 2.55 lire in June, now it is worth 2.80, but ten years ago it was worth 2.95 (it even briefly went above 3 liras). The same is true for the dollar against the lira.
      The Turkish economy grows because it can do nothing but grow - much of it is fueled by the construction industry, whose activities are linked to population growth. An average-sized Turkish region has more construction going on than the whole of an average-sized European country. More houses were built in Kayseri in 2010 than were built in the whole of Scotland, Wales and Northern Ireland combined.
      Last edited by bell-the-cat; 09-16-2011, 11:26 AM.
      Plenipotentiary meow!

      Comment

      • #4
        Re: Turkey’s economic lie

        Originally posted by bell-the-cat View Post
        This report is actually a load of racist Israeli propaganda. Does the author think that his lies become truth simply because it is a xxx who is saying it - or maybe he is counting on the ignorance of his audience about what the Turkish economy is really like, or on people placing wish-futhfillment over reality.

        "local currency continues to plummet vis-à-vis the dollar" erm - the reality is that the dollar has plummeted in value (against all curencies including the Turkish lira), and the Turkish lira is now so strong that it is seen by Turkish industrialists as being vastly overvalued and placing Turkish exports at risk. The Turkish lira has been increasing slowly but steadily in value in real terms against major currencies since the late-1990s. It has dropped in value very slightly in the last few months. The pound was worth 2.55 lire in June, now it is worth 2.80, but ten years ago it was worth 2.95 (it even briefly went above 3 liras). The same is true for the dollar against the lira.
        The Turkish economy grows because it can do nothing but grow - much of it is fueled by the construction industry, whose activities are linked to population growth. An average-sized Turkish region has more construction going on than the whole of an average-sized European country. More houses were built in Kayseri in 2010 than were built in the whole of Scotland, Wales and Northern Ireland combined.
        Bell you are reading your charts upside down.
        If you do not look at currency charts here a Bloomberg article.
        I hope you do not disbelieve Bloomberg because its has Yahoudi ownership.

        Bloomberg - Are you a robot?
        http://www.bloomberg.com/news/2011-07-22/turkish-lira-may-weaken-to-record-low-citigroup-says-technical-analysis.html



        The lira, this year’s worst- performing emerging-market currency, may weaken 9.3 percent to an all-time low against the dollar, according to Citigroup Inc.’s analysis of trading patterns.

        The Turkish currency headed for its lowest close since March 2009 and the ISE National 100 Index (XU100) of stocks fell for a seventh day in its longest declining streak in almost three years after Fitch Ratings said Turkey’s record current-account deficit is causing “uncertainty” on its outlook for an investment-grade rating.

        The lira, which hit a record low of 1.8066 per dollar in March 2009, rallied and retreated three times, reaching 1.6784 today. This completes a “head-and-shoulders,” which occurs when a price forms three consecutive peaks of valleys, the middle being the largest, according to Citigroup.

        “The completed reverse head-and-shoulders pattern on dollar/lira continues to suggest further dollar strength and eventual test of 1.85, which converges with the trend across the major multi-year highs,” Citigroup said in a research note received late yesterday.

        The lira lost 0.5 percent to 1.6784 per dollar as of 1:45 p.m. in Istanbul, a drop of 1.5 percent this week. The ISE National index slid 0.5 percent to 60,610.97, a retreat of 3.2 percent so far this week.

        Any further declines could be exacerbated if the index breaches the support level of 58,000, Citigroup said. A support level indicates a price at which buy orders may accumulate and help and asset rebound. The ISE 100 touched 58,664.24 March 2.

        A breach of the 58,000 would take the gauge “outside of its range-bound price action, opening the way for lower levels,” according to the note.

        The lira and Turkish stocks slumped today even as the MSCI Emerging Markets Index and most developing-nation currencies rallied after European leaders yesterday pledged more aid for Greece, bolstering demand for riskier, emerging-market assets.

        Citigroup sees the lira depreciating to 1.71 per dollar in the third quarter, versus a median estimate of 1.58 of 21 banks polled by Bloomberg.
        Politics is not about the pursuit of morality nor what's right or wrong
        Its about self interest at personal and national level often at odds with the above.
        Great politicians pursue the National interest and small politicians personal interests

        Comment

        • #5
          Re: Turkey�s economic lie

          Originally posted by londontsi View Post
          Bell you are reading your charts upside down.
          If you do not look at currency charts here a Bloomberg article.
          I hope you do not disbelieve Bloomberg because its has Yahoudi ownership.

          Bloomberg - Are you a robot?
          http://www.bloomberg.com/news/2011-07-22/turkish-lira-may-weaken-to-record-low-citigroup-says-technical-analysis.html



          The lira, this year�s worst- performing emerging-market currency, may weaken 9.3 percent to an all-time low against the dollar, according to Citigroup Inc.�s analysis of trading patterns.

          The Turkish currency headed for its lowest close since March 2009 and the ISE National 100 Index (XU100) of stocks fell for a seventh day in its longest declining streak in almost three years after Fitch Ratings said Turkey�s record current-account deficit is causing �uncertainty� on its outlook for an investment-grade rating.

          The lira, which hit a record low of 1.8066 per dollar in March 2009, rallied and retreated three times, reaching 1.6784 today. This completes a �head-and-shoulders,� which occurs when a price forms three consecutive peaks of valleys, the middle being the largest, according to Citigroup.

          �The completed reverse head-and-shoulders pattern on dollar/lira continues to suggest further dollar strength and eventual test of 1.85, which converges with the trend across the major multi-year highs,� Citigroup said in a research note received late yesterday.

          The lira lost 0.5 percent to 1.6784 per dollar as of 1:45 p.m. in Istanbul, a drop of 1.5 percent this week. The ISE National index slid 0.5 percent to 60,610.97, a retreat of 3.2 percent so far this week.

          Any further declines could be exacerbated if the index breaches the support level of 58,000, Citigroup said. A support level indicates a price at which buy orders may accumulate and help and asset rebound. The ISE 100 touched 58,664.24 March 2.

          A breach of the 58,000 would take the gauge �outside of its range-bound price action, opening the way for lower levels,� according to the note.

          The lira and Turkish stocks slumped today even as the MSCI Emerging Markets Index and most developing-nation currencies rallied after European leaders yesterday pledged more aid for Greece, bolstering demand for riskier, emerging-market assets.

          Citigroup sees the lira depreciating to 1.71 per dollar in the third quarter, versus a median estimate of 1.58 of 21 banks polled by Bloomberg.
          Even after the latest drops, the lira is still worth a lot more now against the euro, dollar, and pound than it was worth 10 years ago. If someone in Turkey in their inflation-ridded 1990s had said in that sort of thing was possible they would have been carted off to an lunatic asylum!

          The latest fall will make the lira worth about what Turkish industrialists want it to be worth, and about what Turkish economist say it is worth, and it will greatly improve the position of both Turkish exports and the Turkish tourism industry. "The lira, which hit a record low of 1.8066 per dollar in March 2009" is a lie, Yahoudi or whatever. In the early 2000s, at the start point of its current increase in value, it was around 1.9 per dollar, or 2.95 per pound: that was its low point, and everyone back then expected the lira's value to continue to go even lower, with no limits to its decline (they thought this for no other reason than for the previous 15 years that was what had always happened).

          In 1984 100 Lira (i.e. old Lira) was worth about 1 dollar. Since 100 old Lira = 0.0001 new Lira, that's equivalent to a current exchange rate of 1 Lira = $10,000! That shows you how bad inflation in Turkey was in the 1980s and 1990s.
          Last edited by bell-the-cat; 09-17-2011, 06:14 PM.
          Plenipotentiary meow!

          Comment

          • #6
            Re: Turkey’s economic lie


            EURO - TRY


            USD - TRY




            As usual you are in bull.s.hit mode.

            Charts do not lie.
            Turkish lira against the dollar is at its lowest point.
            If you understand anything about charts, the chart clearly shows the TRY fall in value is not a “managed drop” but just a bad drop.
            It is not even managing to keep up with the EURO despite EURO’s own problems.
            Last edited by londontsi; 10-03-2011, 02:03 PM.
            Politics is not about the pursuit of morality nor what's right or wrong
            Its about self interest at personal and national level often at odds with the above.
            Great politicians pursue the National interest and small politicians personal interests

            Comment

            • #7
              Re: Turkey’s economic lie

              bell is the queen of bs, what else did you expect?
              For the first time in more than 600 years, Armenia is free and independent, and we are therefore obligated
              to place our national interests ahead of our personal gains or aspirations.



              http://www.armenianhighland.com/main.html

              Comment

              • #8
                Re: Turkey’s economic lie

                59 Turkish Airlines pilots resign since January

                http://www.todayszaman.com/business_59-turkish-airlines-pilots-resign-since-january_398712.html


                Fifty-nine pilots at Turkey's national flag carrier Turkish Airlines (THY) have resigned since the beginning of this year to start working at rival companies, citing a weak lira, media reports said on Wednesday.

                THY was not immediately available to comment on the issue. Its pilots are paid in Turkish lira, which has lost nearly 30 percent against the US dollar since January.

                On Wednesday, Turkish media outlets quoted anonymous sources stating that the carrier experienced problems with pilot retention after failing to pay in US currency. The pilots reportedly were attracted by more competitive US dollar salaries from rival firms such as Qatar Airways. THY employs nearly 700 foreign pilots, who reportedly earn between TL 10,000 and TL 35,000 a month. In addition to the fall in pilots' buying power, “personal reasons” were also among the key factors pilots have cited as reasons for resignation, sources have added.

                THY is Europe's fourth-largest carrier and its passenger numbers rose 8.5 percent from January to June, peaking at 28.5 million people. The airline is due to intake 17 Airbus and 26 Boeing planes in 2016 and is in talks with banks to raise up to $3 billion in loans to finance these purchases.
                Politics is not about the pursuit of morality nor what's right or wrong
                Its about self interest at personal and national level often at odds with the above.
                Great politicians pursue the National interest and small politicians personal interests

                Comment

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