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Turkish Lira Is Imploding – – Economy Of Erdogan About To Go Cold Turkey

August 13th, 2018 Comments off

When the aspiring Sultan of neo-Ottoman Turkey, Erdogan, called early presidential elections, nuanced observers pointed out he probably knew in advance that the Turkish economy was about to enter a severe recession, and he wanted to secure his near-dictatorial presidential  powers before the deluge set it. It is now setting in , with a vengeance. The country’s  fragile currency, the Lira, continues to erode at breakneck speed. On August 12, it plummeted to just above 7 to one U.S.  dollar.

Turkey’s high growth rates under Erdogan were illusory; they were fed by massive borrowing from foreign banks, the  loans denominated in dollars and euros. The collapse of the Turkish Lira leaves open the probability that foreign credit  will disappear, battering the Turkish economy with severity.

Turkey’s looming economic and financial collapse cannot be easily contained. Many banks, especially in Europe, hold Turkish debt in large quantities. An economic collapse in Turkey will have highly negative ramification in Europe, and   likely globally.

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