Turkish Lira Crisis


#1

The Turkish Lira is taking lumps today. Erdogen is blaming the great Satan.


#2

Erdogan has silenced the press, taken control of the legislative, the executive, the judicatory and the central bank. He seems intent on blaming everyone but himself, but the defacto dictator cannot see that it is he who has caused this.


#3

Well the narrative is that there is a rush to the dollar LoL, with Gold not doing too good the last few months. If the USD was such a safe haven why are the 10year yields nearly 3%, while Germany is 0.3% and even the UK is 1.3%.

cnbc.com/2018/08/13/gold-markets-dollar-near-13-month-high.html


#4

Because …

seekingalpha.com/article/4197822-u-s-inflation-hits-new-high


#5

This isn’t the first time the Turkish lira has tanked, it was only a few years ago that they took several zeros off the notes.
Edit: according to wikipedia:-


#6

Russell Napier was predicting this back in 2017, it looks like he has been proven right!

cernocapital.com/turkey-better-not-look

What’s most scary here though is that his updated thoughts are that a Turkish default would only be the first of a wave of defaults within emerging market economies.

Sorry for the link to Zerohedge, but this is one that is actually worth reading zerohedge.com/news/2018-08- … t-all-time


#7

eh, you know he Fed has been raising interest rates ??(see dot plot for their predicted hikes). UK/EZ not so much

meh, curve still flat - 30bps difference between 5 and 10Y rates!!! 25bps between 2Y and 10Y! hardly Zimbabwe


#8

The fed has also scaled back QE.


#9

But yet the Trump presidency (to some extent the catalyst for this crisis) needs a weak dollar to address the trade deficits. Irresistable force meets immovable object.
Eur/usd at 1.14 it was up around 1.24 as recently as April.