Trump Sanctions NATO ALLY Turkey, Lira Dives 2.1% To Record Low
Mike (Mish) Shedlock | Aug 02, 2018 01:36AM ET
The Lira is under heavy pressure from Trump today, but Turkey's problems have been escalating for years.
Bloomberg reports Lira Falls to Record as U.S. Sanctions Turkey .
The lira slumped to a record low as the U.S. imposed sanctions on two Turkish ministers over the continued detention of an American pastor.
The sanctions target Turkey’s Minister of Justice Abdulhamit Gul and Minister of Interior Suleyman Soylu, both of whom “played leading roles in the organizations responsible for the arrest and detention of Pastor Andrew Brunson,” the U.S. Treasury Department said in a statement. The currency slumped as much as 2.1 percent to 5.0157 per dollar after two people familiar with the matter said the U.S. has prepared a list of Turkish entities and individuals to target should it decide to impose sanctions on Recep Tayyip Erdogan’s government.
Lira 15-Minute Chart
Turkey's problems go back a decade.
Lira Monthly Chart
In 10 years the lira plunged 76.74% with the bulk of the decline starting January 2013. It closed 2012 at 1.7589. That's a 64.79% decline in 5.58 years.
Trump Demands Turkey Free US Minister
The US wants Turkey to release protestant minister Andrew Brunson who is charged with "acting on behalf of two groups deemed by Turkey to be terrorists."
Brunson has been under house arrest in Turkey since October 7, 2016.
Erdogan Accuses US of ‘Zionist Mentality’
Turkish President Recep Tayyip Erdogan Accuses US of ‘Zionist Mentality’ .
Turkish President Recep Tayyip Erdogan on Wednesday vowed his country would not give into threats from the US over the case of an American pastor being tried on terror charges, accusing Washington of showing an “evangelist, Zionist mentality.”
“It is not possible for us to accept that America gets up, especially with an evangelist, Zionist mentality, and uses this kind of threat-filled language,” Erdogan added.
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Erdogan Demands US Return Turkish Cleric Fethullah Gülen
As part of the complicated mess, Erdogan Demands Gulen Extradition for US Pastor’s Release .
Speaking in a live interview on the Turkish NTV news channel on April 21, the Turkish president claimed “the US is behind [Gülen],” the Muslim imam he accuses of masterminding a deadly coup attempt in July 2016 to overthrow his elected government.
“If you are not giving him to us, then excuse us,” Erdoğan said, “but from now on, whenever you ask for another terrorist, as long as I am I office, you will not get them.”
The United States has denied repeated requests for Gülen’s extradition, citing a lack of sufficient judicial evidence of his involvement in the failed coup.
Nutshell
In a nutshell, Erdogan arrested Brunson hoping to force the US to release Gulen in exchange.
Charges of terrorism against both are ridiculous. Edrogan refuses to give the US evidence.
Death Penalty
Also note, Erdogan Ready to Approve Law on Death Penalty if Passed by Parliament .
That is against EU law.
Tensions will rise. Erdogan may flood Greece with refugees.
US Military Bases in Turkey
What's Next?
If Trump presses Turkey hard enough, Erdogan may shut down Turkish air space to the US or take over US missile bases and military bases.
Turkey on Venezuela's Path
- Erdogan jailed political opponents
- Parliament effectively made Erdogan prime minister for life
- Erdogan took over the press
- Erdogan took over the courts
- Erdogan took over finance
- Erdogan about to take over the central bank
Hyperinflation Path
Venezuela did not hop straight into hyperinflation and Turkey likely won't either.
However, if Turkey remains on the same path, which seems highly likely, hyperinflation is the inevitable outcome.
For discussion, please see Spotlight Turkey: Hyperinflation and Mass-Migration Crisis Inevitable .
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