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Meanwhile, In Turkey!
If the situation weren't so burdensome for the populace, I'd say you have to admire Recep Tayyip Erdogan's commitment to belligerence. In that regard, he's a miracle of nature.
During a week that found developed market central banks dialing up hundreds of basis points in rate hikes to combat soaring inflation, Turkey, where inflation is 80%, cut rates. Again.
If you keep apprised of this ongoing tragicomedy, but are fortunate enough not to be affected by it, you'll be hard-pressed not to laugh
Erdogan is the king of chaos. I recall when you were writing about him many months ago as he dealt with the rapidly diminishing value of the lira, which today hovers slightly over a US nickel. He’s obviously still working from the same book of instructions. He fancies himself a strongman, thumbing his nose at common sense – and reality itself. He’s sort of nuts.
How is letting the lira run wild going to get Turks to de-dollarize? I mean, they clearly aren’t using that TIPS-like vehicle for lira-holders they announced last year, right? So what exactly is the end-game? Just get people used to inflation and to ignore it, since domestic holders are protected from it?
Well, I think one key here (which is why I closed with the quote about elections) is that Erdogan doesn’t plan to give up power under any circumstances. He’s demonstrated as much time and again. He’ll do whatever he has to do, although I think his assumption (which is probably a safe one) is that he’ll always retain enough genuine support to hang onto power without having to resort to the sorts of measures that’d forever put him in a category he’d rather not be in. To be clear, I’ve followed Erdogan obsessively for years, so I’m fully apprised of what he’s capable of. My point isn’t to suggest he isn’t a full-on dictator masquerading as a soft-autocrat (that’s exactly what he is). Rather, my contention is that inflation or no inflation, enough people support him, and he has enough control over the organs of the state, and Turkey is valuable enough to the West (not that it’d be somehow less valuable without him, it might be more valuable, but he’s a known quantity and a shakeup would be tumultuous at least initially), that he’s comfortable in his position. He doesn’t think inflation will cause (another) coup, and he’s pretty sure he’ll figure out a way to “win” at the polls. Things have a way of working out for him. He’s crafty and he’s made himself synonymous with Turkey, as much as that infuriates his critics, many of whom see him as — you know — a scourge. It’s just difficult for me to imagine waking up to a headline that says “Erdogan Concedes Inflation Mistakes, Gracefully Cedes Power”
Democracy needs capitalism and capitalism needs democracy. Erdogan sees both as a pain in the ass……