Isn’t this a lovely thing

Recep Tayyip Erdogan may have been placing his own future on the line as he pledged to lead Turkey in fighting an “economic war of independence” against markets.

The MMT and monetary theories of Mad³ are in full display here. They’re printing money to spend so as to meet need. They’re not raising interest rates in order to beat inflation because that’s regressive. They’re fighting to maintain the FX value of that currency.

And they’re finding that you can’t control all three at the same time. Which is what will happen to the Bawbee as well.

No doubt the P³ has some reason why this won’t in fact apply but it’s difficult to see what.

As the president forces his central bank into market-rattling interest rate cuts that defy the laws of economics, prices are soaring and the country’s currency is in freefall – along with his people’s confidence.

Yep:

The Turkish president has pursued policies widely rejected by mainstream economists, shredded the central bank’s independence and vowed to fight high interest rates,

8 thoughts on “Isn’t this a lovely thing”

  1. …prices are soaring and the country’s currency is in freefall – along with his people’s confidence.

    Clearly, the People are letting the Government down…

  2. I feel sorry for the average Turk, but it’ll make a great experiment to write up in future economics text books. Of course, when it fails it’ll be because Erdoğan “used the wrong sort of MMT” rather than because MMT is wrong, just like the excuses for the failure of communism.

  3. I’m amazed Erdogan has time to lead any sort of “war” effort.

    All those goats don’t fuck themselves.

  4. Bloke in North Dorset

    Of course, when it fails it’ll be because Erdoğan “used the wrong sort of MMT” rather than because MMT is wrong, just like the excuses for the failure of communism.

    When it fails (I think we could probably say its already failed) my money’s on it being a neo-liberal consipiracy.

  5. Bloke in North Korea (Germany province)

    They’re printing money to spend so as to meet need.

    TRY – check
    USD – check
    GBP – check
    EUR – check

    They’re not raising interest rates in order to beat inflation because that’s regressive.

    TRY – check
    USD – check
    GBP – check
    EUR – check

    They’re fighting to maintain the FX value of that currency.

    TRY – check
    USD – hold my beer
    GBP – hold my beer
    EUR – hold my beer

  6. Bloke in NK/G,

    🙂

    Anyway, I’m in Turkey at the moment. Just moved my US dollar denominated account from my local branch to here. Phew.

    Habib Bank Limited 212-246 02 20 212-234 08 07 http://www.habibbank.com.tr
    to
    JPMorgan Chase Bank 212-326 83 00 212-326 83 84 http://www.jpmorgan.com

    Obviously this is not my only hedge. My son and first cousin are both officers in the regional military command.

    You know the drill.

Leave a Reply

Your email address will not be published. Required fields are marked *