Time to check in with NATO member Turkey to see how one of my predictions that was naysayed and mocked as ridiculous when I suggested it on one of Robert Gore’s pieces about the annexation of Crimea in Ukraine by Russia and this whole bullshit narrative being peddled to the PUBLIC that Trump and Putin colluded to win the 2016 Presidential election, is going .
Remember this was around the time that the Podesta emails were leaked via Wikileaks (supposedly a non-state funded purveyor of leaked, hacked and stolen information). I wonder if Wikileaks will be tied in some way to the Russian government by the globalists to further the narrative of Russian interference with the 2016 Presidential elections and further enrage the Always-Trumpers and satiate the Never-Trumpers.
I’m sure there were multiple interferences by multiple actors, private , corporate and state funded actors, especially with the Democratic primaries and the DNC -Seth Rich murder (reminder: he was a Bernie Sanders supporter just like George Webb is)…I would also argue that this is a direct result of the political climate and atmosphere after the Supreme Court removed State campaign contribution caps via CITIZENS UNITED vs. the UNIYED STATES OF AMERICA, because it violated corporations freedom of speech to donate as much money as they wanted to any or ALL sides.
It’s become an all out free for all, no holds barred bar fight to see who gets control of the executive branch and CEO position that has been primed to be turned into an acting-dictator whenever the “right” made man or woman with the personality profile required is placed there by our global corporate overlords. Some might say they found their man already. Time will tell.
My prediction was that Turkey will depart from NATO, either voluntarily or compelled by other NATO members, particularly the U.S. Well, it seems the new sanctions placed on Turkish steel by Brand Trump along with the tough talk on the American pastor being held by Turkey will be the straw that breaks the Turkish camel’s back.
Erdogan warned in a recent rant that the “Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies.”
I wonder who those “friends” will be? Hmmm….im going out on a limb here and suggesting it will be who I said it was , the BRICS (Brazil, Russia, India, China, South Africa and Iran*not officially a member).
This is ALL theater for mass consumption to justify what is to transpire….TURKEY withdrawing from NATO, moving into the open arms of China and Russia who will no doubt prop up the lira with infusions of Chinese and Russian currencies tied to loans and pipeline deals. Trump will tout this as a victory of American principles … Turkey will be demonized in America…
I wonder what the trigger will be for Germany to side step NATO and align with the BRICS? THINGS are beginning to accelerate and all we hear is crickets about North Korea now after moving a bunch of hardware over there….calm before the storm in more ways than one.
Remember, this all has to happen along the road to World War III between the BRICS and NATO that I previewed
In Furious Rant Erdogan Lashes Out At Trump: “We See The Game You’re Playing, We Dare You”
In the wake of the U.S. doubling tariffs on Turkish steel and aluminum on Friday which sent the Turkish lira and capital markets into free fall, Erdogan wrote a Friday New York Times op-ed cataloging his grievances and threatening to walk away from the decades-old alliance. “Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies,” he wrote. Meanwhile, while announcing the new sanctions aimed at Turkey, Trump tweeted his “analysis” of the situation: “Our relations with Turkey are not good at this time!”
The escalating war of words continued on Saturday, when speaking at a rally in the Black Sea town of Unye, Erdogan said that “it is wrong to dare bring Turkey to its knees through threats over a pastor,” and blasted “shame on you, shame on you. You are exchanging your strategic partner in NATO for a priest.” At the same time, Ibrahim Kalin, Erdogan’s spokesman, said that the U.S. is “facing the risk of completely losing Turkey.”
And if anyone was hoping that Erdogan’s temper would have cooled one day later with just hours left before FX markets reopen, they were sorely disappointed on Sunday when in his latest public address in the town of Trabzon, Erdogan doubled down on his belligerent rhetoric against the US once again, via Bloomberg:
- ERDOGAN: WE SEE THE GAME YOU’RE PLAYING; WE DARE YOU
- ERDOGAN: THEY’RE TRYING W/ MONEY WHAT THEY COULDN’T DO IN COUP
Here one assumes that by “they” Erdogan was referring to the US, even though the Turkish’s president official line all along was that the culprit behind the “failed coup” was the exiled cleric Fethulah Gullen who has been accused by Erodgan of being behind the country’s imaginary “shadow state” for years, and which gave Erdogan a green light to crackdown on any potential opponents, leading to an unprecedented purge of people in public positions, with tens of thousands of government workers either ending up in prison or unemployed.
Erdogan then continued by calling for all Turks to convert their foreign currency holdings, i.e. mostly dollars, to liras, and warning that “economic attacks will only increase Turkey’s unity.”
Among the other notable highlights, Erdogan said that “we will say bye-bye to those who are ready to give up their strategic partnership for their relations with terror organizations” and that Turkey can “respond to those who started a trade war against the entire world and included our country in it by gravitating towards new co-operations, new alliances” i.e. China and Russia (which earlier today said it was considering dropping the US dollar altogether in oil trade), and warned that “it is foolish to think that Turkey can be thrown off by FX” although with inflation set to explode as the currency collapses, the local population may have a different view of this.
Finally, anyone wondering which way the Lira will open later today, Erdogan did his best to make the ongoing collapse accelerate, stating that “we know very well that those who say we should make an agreement with the IMF are saying we should give up on political independence“, thus eliminating the possibility of an IMF bailout which together with capital controls were the only two options Turkey had left to arrest the lira’s plunge.
As for higher interest rates, a critical requirement to at least slow down the country’s economic descent, Erdogan had some words as well: ”
- “They are trying to do with money what they couldn’t with provocations and the coup. This is clearly called an economic war”
- “Interest rates are tools of exploitation that make the rich richer and the poor poorer. As long as I’m alive, we will not fall into the interest-rate trap”
And the punchline:
- ERDOGAN SAYS READY TO RESPOND W NEW FINANCIAL TOOLS VS DOLLAR
It was not clear what those tools would be, but they certainly would not be welcome by the market. After all, as Bloomberg reported overnight, investors believe that Turkey’s central bank will have to flout Erdogan’s desires and announce a significant increase to its benchmark 17.75 percent benchmark rate just to stop the currency’s free-fall as it touches levels that had been unimaginable even a month ago.
“Seems like a complete crash, so they need to act now,” said Morten Lund, a strategist at Nordea Bank AB in Copenhagen. “The lira will keep falling if they don’t hike rates.”
And after Erdogan’s latest rant – which clearly crushed any speculation of either more rate hikes or an IMF bail out – foreign investors may have no choice but to pull their capital out of Turkey, transforming what was already an acute currency crisis into a full blown financial panic.
Which leaves capital controls as Erdogan’s last option. The problem, as we reported yesterday, is that while the Turkish crisis was relatively contained in the context of emerging markets due to the nation’s unique capital account funding needs…
… if there was one thing that could force the Turkish collapse to escalate and result in global contagion, it is the fear of capital controls. This is how Robert Marchini, a political strategist at Zenith Asset Management laid out to Bloomberg how he see the “worst case scenario” for Turkey:
Regarding Turkey as a potential ‘Black Swan’-level event, I’m skeptical the collapse of the currency per se would be enough of an incident. The market has known for a while Erdogan was leading the country in an economically reckless direction. The real question was when it all would blow up (although I don’t think anyone thought it would go down this quickly.) More specifically, I think that the [EU] banks’ exposures to both external debt and local operations, while significant, are not at a crisis level.
Where the real risk lies, and one that I think has not been adequately considered, is the markets’ reaction to [potential] capital controls. Should Erdogan impose capital controls, in addition to banks’ writedowns on [now-toxic] Turkish assets, investors’ reaction is likely to be panic and to yank capital out of other EMs before either A. That EM’s currency falls further and/or B. That EM’s government gets the same idea as Turkey.
This becomes somewhat of a self-fulfilling prophecy, and in my opinion is where the real possibility for contagion lies.
In other words, having done nothing while the Turkish financial crisis spiraled out of control first slowly and then blazing fast, Erdogan now finds himself facing a most unpleasant dilemma: damned if he does, and damned if he doesn’t.