Erdogan - Economic Warfare and the new old Bretton Woods - History cycle for the Dollar crisis
The eternal Cycle of Crisis in Capitalism is repeating again.
Many European banks are bearing the brunt, with Goldman Sachs and JP Morgan both down around 1% and traders remain worried that the Turkish crisis will escalate, unless Ankara takes more decisive steps - such as an interest rate hike.
The Economic Warfare of Donald Trump against the World is becoming more latent lately, after some of the Militias pro-USA had been beaten by Turkish mercenaries and Militias pro-Regime in Syria. Turkey was always considered a pariah for USA, being an Islamic State in Europe, in NATO, against the west policy and against the hegemony of USA in Europe. The close relations to Russia had always been not accepted by USA front Turkey politics.
Trump in the economic protectionism is being very well explored by him and the American Globalists and Neocon personal, that is working together to make America a global institution, creating the chaos in nations and having the capability of solve all the problems, being the only global hegemony, that has lost since the end of War on Terror. Before this problem with Turkey, the increase of fees against the Chinese market made some countries with economic problems at the import and export taxes, like Brazil.
This war involving astrategy based on measures the primary effect on the weaken the economy of another State or Country. In Military, the economic warfare reflects on economic policy, followed by covert operations, like the history of the Economic Hitman, and information operations. After the fail of the State and the restore of natural resources, the final operation is a crash on economy, specullative attack and maybe a military intervention to guarantee the payment of the debts.
This concept is applicable between nation states in times of Warfare, like the hybrid scenario Turkey and USA are living under to project their power in Syria, to promote the USA hegemony or a Turkish-Russian projection and not let the USA infiltrate the zone.
This not completely neoliberal politics, make Trump in a direct clash against the Turkey. After a desastrous meeting with the European leaders, Trump showed to be more interested on relations with old rivals, like China, North Korea and Russia, than with old USA alies, like Germany and England. The anti-Globalist politics and the new Neocon police, with American Globalism, the clash of Economic Wafare in world is being explored, trying to break some great surplus economies, like Germany.
Naturaly this was very clearly to be detected, as Turkey is one of the countries that doesn't have international banks.
After the fall of 15% of the Lira face the Dollar, the Turkish Lira keeps falling and the debt interest in 10 years is a record. Mr. Erdogan is sayng that was betrayed by USA. The Turkish money keeps on falling after the renewal the historic rivalries. After the new devaluation the Turkish economy is about to lose more 8% and is falling other European Markets together with them. Mr. Erdocan said the economy is siege by the USA betray.
After the new face of the wild Economic Warfare, Erdogan reborn with the old solution given by Mr. General Charles de Gaulle, who threatened to change the Dollar to Gold, that made president Nixon finish the Gold-Dollar Pattern in Bretton-Woods. The Cyclic history repeats, with the Cruzade of Economic Warfare that USA always hated since the Free France movement, leadered by De Gaulle, making the view that USA never respected the particularities of Economy and Politics of each country.
The New 'anti-Bretton-Woods' style is done by Mr. Erdogan when he request the population to changed the reservations of Dollar and Euros for Turkish Lira, in a try of stop the devaluation of the money and Erogan is waiting for new 'economic attacks' from the USA.
The Economic Hitmans are working in the non-Globalist countries and specialy those who are projected on Eurasia and are requesting their traditions back. Both ex-Alied countries because of the Turkey is a member of NATO, are involved of a diplomatic clash because of the arrest of the USA Pastor, Andrew Brunson, in Turkey, accused of a coup d'etat in 2016 against Mr. Erdogan.
Andrew Brunson is blamed on have connection with considered terrorist group PKK, pro-Kurds, and the cleric Turkish movement settled in USA, Fethyllah Gulen. considered by the government as the head of the coup d'etat against him.
This American Protectionism is being fistly on overtax minerals from Turkey, like aluminium and steel, in 20% to 50%, making the Turkey search for the new customers to the products.
Also, the world bank J.P. Morgan strategist said that Turkey found itself in the "midst of a perfect storm" of worseing the financial conditions, shaky investior sen, inadequate management of the economy and traiff threats from the USA. This free fall has stoked of a economic fallout into other emerging markets and banking systems, also, after the NATO failure and the Brexit. "Turkish assets have been under severe pressure," the strategists wrote in a Friday note. "While Turkey makes up a small percentage of the global economy and financial markets, investors are worried about the issues in Turkey causing damage in other markets around the world, particularly Europe."
This problem will reflect in a credit-driven boom, the surge in Turkish inflation, and also a dramatic plunge in country exchange in 2018, beyond the risks, still raised some question of how much the Erozone economy can be affected and how much can they endure.
This problem in Economy is dragging since the migration crisis and the pre-election fiscal stimilys problem, that elevated the growth and some not good policy decisions, raised a major inflation. The country is experiencing a dangerous widening of current deficit, in adition mr. Erdogan presured the Central Bank to keep the interest rates low undermining investitors confidence.
The Hybrid scenario is being explored in non operational and tactical scenarios, that the strategy is focused on break the economy of the countries and explore the capacity of the country in a financial crisis. In 90's Chinese Book of Defense was predicting this warfare for 30 years and the strategists were right... this crisis is starting the the USA administration and the return of the desire of USA on being the hegemony, as the Russia being the new hegemony against a global world order.
The Crisis will for sure cause impact in the relations with China and with other European countries that will put in recess and making the impact of that USA is the best marked in the World as you can check that the ecomonies on China, Eurozone and Euro are in recess and the USA is growing, less but still growing, making the market good for new investitors.
Turkish president Recep Tayyip Erdogan blames lira crash on Donald Trump 'plot'
US president accused of waging 'economic war against the entire world'
Turkey’s president has blamed the crash of the lira on the United States, claiming a “political, underhand plot” had sent the value of his country’s currency tumbling to record lows.
Recep Tayyip Erdogan accused Donald Trump of waging “economic war against the entire world”, after the American leader escalated a diplomatic feud by doubling tariffs on steel and aluminium.
“The aim of the operation is to make Turkey surrender in all areas, from finance to politics,” the Turkish president told supporters in the Black Sea city of Trabzon.
“We are once again facing a political, underhand plot. With God’s permission we will overcome this."
The lira has lost more than 40 per cent of its value against dollar this year, amid worsening ties between Turkey and the US and concerns over Mr Erdogan’s influence over the economy.
The fall turned to meltdown on Friday, when the lira dropped 14 per cent, rattling global markets.
Turkey’s currency pulled back from an overnight record low of 7.24 to the dollar on Monday after its central bank pledged to provide liquidity and cut reserve requirements for Turkish banks.
It came after finance minister Berat Albayrak said authorities would start implementing an economic action plan on Monday morning.
On Sunday night the lira’s collapse hit Asian shares, weakened the South African rand and drove demand in global markets for safe currencies including the US dollar, Swiss franc and yen.
Speaking in Trabzon, Mr Erdogan dismissed suggestions that Turkey was facing a financial crisis like those seen in Asia two decades ago.
"What is the reason for all this storm in a tea cup? There is no economic reason,” he said. ”This is called carrying out an operation against Turkey.”
“We will give our answer, by shifting to new markets, new partnerships and new alliances, to the one who waged an economic war against the entire world and also included our country.
“Some close the doors and some others open new ones.”
Mr Trump announced additional sanctions on Turkish metals last week as relations between the two nations continued to sour over Ankara's detention of a US pastor.
"Our relations with Turkey are not good at this time," tweeted the US president, two days after talks between American and Turkish officials about pastor Andrew Brunson, 50, ended without any obvious progress.
Mr Brunson, who has lived for two decades in Turkey, was arrested in 2016 and charged with having terrorist connections. He is also accused of having links to the failed coup attempt on Mr Erdogan that year.
Trump doubles steel and aluminium tariffs on Turkey amid row over detained US pastor
Move come as Turkey's economy stumbles
Donald Trump has announced a doubling of tariffs against Turkey, as relations between the two nations continue to sour following Ankara’s detention of an American pastor.
The US president announced on Twitter the additional sanctions for Turkish steel and aluminium, two days after talks between US and Turkish officials in Washington trying to resolve the crisis over detained pastor Andrew Brunson concluded without any obvious progress.
“I have just authorised a doubling of tariffs on steel and aluminium with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong dollar,” the president wrote.
He added: “Aluminium will now be 20% and Steel 50%. Our relations with Turkey are not good at this time.”
On Wednesday, Turkey’s deputy foreign minister, Sedat Onal, and officials from Turkey’s finance ministry, met around an hour with US deputy secretary of state, John Sullivan.
In a statement, the US State Department spokeswoman Heather Nauert said only that they “discussed a range of bilateral matters including Pastor Brunson”. Turkey’s embassy has yet to comment on the talks.
Mr Brunson, 50, who has lived for two decades in Turkey, was arrested in 2016 and charged with having terrorist connections. He was also charged on connection with the failed coup attempt that year against President Recep Tayyip Erdogan.
Having spent two years in jail, he was recently released to house arrest and his trial is due to resume in October.
The Washington Post said the detention of the pastor has been the focus of “downward-spiralling relations between the two Nato allies, as President Trump and Vice President Pence have insisted Mr Brunson is innocent and demanded his release”. Last week, Trump imposed sanctions against two Turkish cabinet ministers, actions that were quickly reciprocated by Mr Erdogan.
Turkey said it would respond to the latest increase in tariffs in kind.
The move by Mr Trump comes as Mr Erdogan appeals for calm as the country’s currency plunges, urging people to change foreign money into local lira.
The lira tumbled about 10 per cent on Friday to another record low, as investors worried about the joint impact of Mr Erdogan’s unorthodox economic policies and US sanctions.
Mr Erdogan said during an address to supporters: “Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks. This is a domestic and national struggle.“
He appeared to blame foreigners for trying to hurt Turkey, saying: “This will be my people’s response against those waging an economic war against us.”
Even as the Turkish president spoke, the lira fell further.
Both countries are determined to try and resolve the standoff between the two nations, hence this week’s meeting in Washington.
One element of an agreement could possibly include a prisoner swap, with Mr Brunson’s being released in exchange for the return home of Turkish banker Hakan Atilla.
Mr Atilla was sentenced in federal court earlier this year to 32 months imprisonment for his involvement in violations of US sanctions on the purchase of Iranian oil.
Turkey’s Economic Crisis: Does It Matter for the Eurozone?
A deep Turkish recession could lead to more migrants leaving Turkey for the EU. Currently more than three million Syrian refugees are living in Turkey.
By Carsten Hesse, August 13, 2018
U.S. sanctions
The pressure on the Lira and Turkish bond yields have increased dramatically over the last four weeks due to the recently announced U.S. sanctions and fears of a further escalation to tit-for-tat between Turkey and the United States.
An apparent lack of urgency on the part of the Turkish government to react to the many economic dangers has not helped. Over the last 12 months, the Turkish Lira fell by about 33% versus the euro.
This decline undoubtedly helps the Turkish tourism sector, but spells trouble for the rest of the economy. The decline in the Turkish Lira and rising borrowing costs cause a big headache for many Turkish companies, as they have borrowed in foreign currency despite receiving revenues in local currency.
The credit-fuelled consumption boom of the past is unlikely to continue due to sky-high inflation, high debt levels and high borrowing costs. A temporary decline in GDP in late 2018 or early 2019 looks quite likely if the authorities do not restore confidence soon.
Even a recession and a debt crisis that would force Turkey to implement capital controls and ask for an IMF bailout cannot be ruled out anymore. Turkey now has much less room to kick the can down the road than before.
Potential repercussions on the Eurozone economy
Turkey’s economy grew by about 60% in real terms since 2009 and its annual GDP now amounts to about €750 billion. That is equivalent to 6.5% of Eurozone GDP. Turkey’s GDP is four times larger than that of Greece, but less than half the size of the Italian economy (despite Turkey having a larger population, at about 80 million compared to roughly 60 million for Italy).
The Eurozone runs a goods trade surplus with Turkey. Last year, the Eurozone exported €63 billion of goods to Turkey. Goods imports from Turkey reached €50 billion last year. Furthermore, Eurozone countries’ exports to Turkey have risen by 80% since 2009.
Imports accelerated even faster, by 88%, during the same time period. However, Eurozone exports to Turkey have declined slightly since 2012 relative to Eurozone GDP. They amounted to just 0.57% in 2017.
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