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Thread: Turkey 2018

  1. #1
    A Self Important Senior Contributor troung's Avatar
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    Turkey 2018



    Turkey's president threatened a major blow to the US — but Trump looks to have called his bluff
    Alex Lockie Aug 14, 2018, 8:12 AM ET
    turkey syria
    REUTERS/Murad SezerTurkish soldiers watching over the Syrian town of Kobani during the height of the conflict with ISIS.
    Turkish President Recep Tayyip Erdog an has been threatening to leave NATO and the West behind for a long time, but he really doesn't have other good options.
    Turkey engages in several behaviors that the rest of NATO finds unhelpful or downright toxic.
    US President Donald Trump's sanctions on Turkey have tanked its economy - but instead of making good on the threats to walk, Turkey is holding on for dear life.
    Turkey's economy has been poorly managed and relies on huge influxes of cash, which other potential allies like Russia or Iran just can't provide.
    Turkish President Recep Tayyip Erdogan, now feuding with his NATO ally US President Donald Trump, wrote an op-ed article in The New York Times on Friday painting his country as the victim of bullying from the US that could result in Ankara "looking for new friends and allies."

    Erdogan's plea for US concessions came after the Turkish lira tanked sharply, bringing markets in Europe and Asia down with it.

    Turkey's economic woes are partly caused by a dispute over the fate of Andrew Brunson, an American pastor whose release Trump reportedly lobbied unsuccessfully for, prompting US sanctions that are contributing to the crisis.

    Turkey has cozy relations with Russia and Iran, and Erdogan's suggestion that Ankara could find "new friends" seems tailor-made to bring fear to European and North American capitals.

    But according to Jonathan Eyal, the international director of the Royal United Services Institute, Turkey has long been looking for other friends and allies, and that's part of the problem.


    "Turkey has no intention of respecting the American sanctions on Iran," Eyal told Business Insider. "It has also said it respects none of the American priorities in Syria. It has offered to buy Russian missiles and other equipment."

    He added: "At every count and on every part, it's gone against not only the US interests, but the interests of the Western alliance."

    Turkey's on-again, off-again proposal to buy Russian missile defenses, for example, shows how the country has frequently courted over-the-line behavior much to the anger of NATO.

    If Turkey were to buy Russian missile defenses, Russia would get a window into NATO's first line of defense. With the US's trillion-dollar F-35 stealth jet coming online specifically as an effort to defeat Russian defenses in the case of war, this represents a hard red line, and Congress has acted accordingly by banning the sale of F-35s to Turkey.

    Erdogan's back is against the wall
    trump like what looking sideways surprised Turkey’s President Recep Tayyip Erdogan
    Tatyana Zenkovich/Pool via REUTERSUS President Donald Trump and Turkish President Recep Tayyip Erdogan at NATO headquarters in Brussels, Belgium.
    If Erdogan were to follow through on his threat to leave NATO, he would open a gaping hole in the alliance and possibly give Russia yet another strategic inroad to influence Europe. But it would most likely only further isolate Ankara from the prosperous West.


    "When the Turkish lira collapsed, so did the Russian ruble," Eyal said, as Russia has invested heavily in Turkey. "If Erdogan wants to shake hands as friends in poverty with [Russian President Vladimir] Putin, he's welcome to do it."

    Trump's sanctions on Turkey alone almost certainly didn't tank the lira, as sanctions rarely have so profound an effect - instead, it's Turkey's mismanaged economy that relies on huge influxes of outside cash as inflation rises and Erdogan resists combating it with higher interest rates because he ideologically opposes it.

    Possible other friends for Turkey, like Russia and Iran, just don't have the cash to bail out Ankara. China might, but it would insist on its own terms, which a fiercely independent Erdogan might not accept.

    Empty NATO threats
    Trump at NATO
    Reuters/Francois LenoirTrump at a meeting of the North Atlantic Council during a NATO summit.
    Even Russia doesn't believe Erdogan's veiled threat to leave NATO.

    "We're not building illusions along with these relations," Frants Klintsevich, a member of the defense and security committee in Russia's upper house of parliament, said of Russia's recent closeness to Turkey, according to Bloomberg.


    Jim Townsend, a NATO expert at the Center for a New American Security, told Business Insider: "Turkey will always remain in NATO. Turkey gains nothing by leaving NATO. They can leave NATO if they want, but they're not going to."

    As Turkey is not a member of the European Union, its only real input to Europe's security posture comes from its participation in NATO, Townsend said. Meanwhile, Turkey conducts most of its trade with Europe.

    Without a credible source of alternative military or financial backing, Turkey is now faced with a binary choice, according to Eyal.

    "The only way this could be resolved now is either the US is going to climb down and accept some sort of deal, or Erdogan will have to lose face, big time," he said.

    But with the US economy doing well and Turkey's economy and prospects quickly tanking, Erdogan has little room to maneuver. He has plenty of reason to wish for mercy from the US, but little reason to expect it unless it falls in line with the US's calls to release Brunson and drop the Russian missiles
    ...
    To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway

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    Turbanator Senior Contributor Double Edge's Avatar
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    haha troung san is back : ) )

  3. #3
    A Self Important Senior Contributor troung's Avatar
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    WAB's least likeable senior member has returned
    To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway

  4. #4
    Turbanator Senior Contributor Double Edge's Avatar
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    ^^Not with me : )

    The lost sheep are returning. Where can they go ? social media. HAHA! people on social media cannot focus on a topic for more than a day. Over here we keep at it for months and years!

    Turkey's economy has been poorly managed and relies on huge influxes of cash, which other potential allies like Russia or Iran just can't provide.
    This is an interesting point. I wonder if the Indian ecnomy back in 1991 was similar. There were no sanctions but soon as the soviets folded we had a cash crunch

    If Turkey were to buy Russian missile defenses, Russia would get a window into NATO's first line of defense. With the US's trillion-dollar F-35 stealth jet coming online specifically as an effort to defeat Russian defenses in the case of war, this represents a hard red line, and Congress has acted accordingly by banning the sale of F-35s to Turkey.
    Aha and this is why Turkey cannot have the S-400 but its ok for India.

    If Erdogan were to follow through on his threat to leave NATO, he would open a gaping hole in the alliance and possibly give Russia yet another strategic inroad to influence Europe. But it would most likely only further isolate Ankara from the prosperous West.

    Even Russia doesn't believe Erdogan's veiled threat to leave NATO.

    "We're not building illusions along with these relations," Frants Klintsevich, a member of the defense and security committee in Russia's upper house of parliament, said of Russia's recent closeness to Turkey, according to Bloomberg.

    Jim Townsend, a NATO expert at the Center for a New American Security, told Business Insider: "Turkey will always remain in NATO. Turkey gains nothing by leaving NATO. They can leave NATO if they want, but they're not going to."

    As Turkey is not a member of the European Union, its only real input to Europe's security posture comes from its participation in NATO, Townsend said. Meanwhile, Turkey conducts most of its trade with Europe.

    Without a credible source of alternative military or financial backing, Turkey is now faced with a binary choice, according to Eyal.

    "The only way this could be resolved now is either the US is going to climb down and accept some sort of deal, or Erdogan will have to lose face, big time," he said.

    But with the US economy doing well and Turkey's economy and prospects quickly tanking, Erdogan has little room to maneuver. He has plenty of reason to wish for mercy from the US, but little reason to expect it unless it falls in line with the US's calls to release Brunson and drop the Russian missiles
    Reality!

    "When the Turkish lira collapsed, so did the Russian ruble," Eyal said, as Russia has invested heavily in Turkey. "If Erdogan wants to shake hands as friends in poverty with [Russian President Vladimir] Putin, he's welcome to do it."

    Trump's sanctions on Turkey alone almost certainly didn't tank the lira, as sanctions rarely have so profound an effect - instead, it's Turkey's mismanaged economy that relies on huge influxes of outside cash as inflation rises and Erdogan resists combating it with higher interest rates because he ideologically opposes it.
    He's artificially keeping interest rates low.

    Possible other friends for Turkey, like Russia and Iran, just don't have the cash to bail out Ankara. China might, but it would insist on its own terms, which a fiercely independent Erdogan might not accept.
    Aha
    Last edited by Double Edge; 16 Aug 18, at 15:38.

  5. #5
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    This is a problem largely of Erdogan's making, with an assist from western banks who hate letting their money lie around at near zero interest rates because it isn't "working for them". So they loan it out to developing nations with a much higher interest rate than they can get in their home country. Then the home nation, having economically recovered, increases their interest rate and suddenly the currency goes up (the dollar specifically in this case) and places like Turkey and Argentina suddenly find all their borrowing in a foreign currency is unserviceable because they are paying off the loan in their depressed currency. Turkey likely would have stumbled no matter what happened, but the fact that Recep "just the Tayyip" Erdogan also refuses to raise Turkish interest rates only serves to compound the problem (you'll notice Argentina *immediately* reacted and did the opposite a week ago despite already having one of the highest interest rates globally). Recep wants to pump his economic growth because it is basically his only claim to fame that makes him just barely 51% popular in his country. He called a snap election because he realized this strategy is about to hit a hard wall. His dictator like policies are making foreign investment flee, along with his control of the Turkish central bank (son in law placed in control in a Trump-esque move, execept that post referendum the Recepticons don't have the counter balances that keep Trump from unilaterally destroying the US economy). On top of that he's gone out of his way to piss off the country that is his largest creditor. But the US sanctions are only accelerating something that would have happened regardless just due to rising US interest rates (which will continue to rise until the trade war bite kicks in). The Erdogang isn't equipped to handle this crisis because they would actually have to admit they made a crisis, so instead Turkey will go into recession at the minimum, economic collapse and default at worst. Politically there's enough power concentrated in the presidency at this point that he will remain in power (likely for life, however long or short that is), but we can expect a lot of civil unrest in Turkey by the end of the year as large numbers of private entities go bankrupt and the government is ultimately forced to tighten its belt.

  6. #6
    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by Josh View Post
    His dictator like policies are making foreign investment flee, along with his control of the Turkish central bank (son in law placed in control in a Trump-esque move, execept that post referendum the Recepticons don't have the counter balances that keep Trump from unilaterally destroying the US economy).
    Trump destroying the US economy ?

    but we can expect a lot of civil unrest in Turkey by the end of the year as large numbers of private entities go bankrupt and the government is ultimately forced to tighten its belt.
    In other words there is still more to come

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    Trump's trade war will ultimately lead to a US recession in 6-12 months. It won't be worse than that because he has far more limited powers that Recep does. And yes, this is just beginning of a huge economic and political crisis for Turkey, and the US sanctions are really just a side show that Recep will use to pass off the blame.

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    Turbanator Senior Contributor Double Edge's Avatar
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    When you say Trump has far more limited powers what's constraining him from doing more ?

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    Congress and the Federal Reserve System, economically speaking. Turkey recently changed their constitution allowing Erdogan far wider powers than a US president.

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    Senior Contributor Oracle's Avatar
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    Quote Originally Posted by Josh View Post
    Trump's trade war will ultimately lead to a US recession in 6-12 months.
    I can't get around this. Could you please explain?

    What I Understand:
    #1. America imports, say $100 of products per year, at, let's assume 5% import tax. Now that tax has been raised to 25% (say). So the administration gets more tax income now, as compared to earlier 5%, and can pump this extra tax dollars to develop infrastructure, which leads to job creation, which in turn leads to more spending. More spending means more tax collection.

    #2. OTOH, consumers in US, having had to pay more for products because of the 20% rise in tax (25% now), will stop spending. Is this the factor?

    #3. If jobs are created, spending increases. So how does it lead to a recession?

    What am I missing?
    Politicians are elected to serve...far too many don't see it that way - Albany Rifles!

    Loyalty to country always. Loyalty to government, when it deserves it - Mark Twain!

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    Quote Originally Posted by Oracle View Post
    I can't get around this. Could you please explain?

    What I Understand:
    #1. America imports, say $100 of products per year, at, let's assume 5% import tax. Now that tax has been raised to 25% (say). So the administration gets more tax income now, as compared to earlier 5%, and can pump this extra tax dollars to develop infrastructure, which leads to job creation, which in turn leads to more spending. More spending means more tax collection.

    #2. OTOH, consumers in US, having had to pay more for products because of the 20% rise in tax (25% now), will stop spending. Is this the factor?

    #3. If jobs are created, spending increases. So how does it lead to a recession?

    What am I missing?
    This is my personal prediction and obviously should not be treated as a fact. If it doesn't occur, I owe you a coke. That said, here's my reasoning:

    First of all, jobs aren't being created. Job growth is minor especially considering the US was already sub 5% unemployment rate. The tax cut basically plowed a lot of money into US corporations. They largely reacted by doing one of two things: paying out higher dividends to their shareholders (generally the top 5-10% of the population or so at best) and buying back their own stocks. So over 90% of that money didn't reach the average US worker. But what it DID do is pump the stock market (share buy backs) and drastically increase the profitability of US corporations in the short term (GDP growth). Wage growth however was stagnant: yet again, the trickle down theory fails to deliver. Actual long term economic growth might have happened if all of that money was given to the consumer class. But all it did was give what economists call a 'dead cat bounce' to the economy: a short lived pump with nothing afterwards to show for it in terms of infrastructure, wages, education, etc. So my prediction is based on the fact that once the corporations are done buying themselves back, giving bonuses, and generally patting themselves on the back, that the US economic fundamentals will still be the same. And those fundamentals are historically weak, outside the somewhat dubious metric of employment. The US isn't run by exports; it is run by domestic consumption (China is desperately trying to achieve this position) and the majority of the consumer class is still struggling and about to trip and fall, and the trip will be tariffs that China is specifically targeting against Trump supporters in agriculture. China will also suffer and go through economic upheavals, no doubt. But end of the day, the combination of draining federal coffers while doing nothing to encourage middle clas consumerism and also picking a trade war with basically every other nation will lead the US to recession within a year, in my opinion.

    But we really should get back to Turkey, which will be incredibly lucky to *only* have a recession in the next year.

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    Senior Contributor DOR's Avatar
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    Quote Originally Posted by Oracle View Post
    I can't get around this. Could you please explain?

    What I Understand:
    #1. America imports, say $100 of products per year, at, let's assume 5% import tax. Now that tax has been raised to 25% (say). So the administration gets more tax income now, as compared to earlier 5%, and can pump this extra tax dollars to develop infrastructure, which leads to job creation, which in turn leads to more spending. More spending means more tax collection.

    #2. OTOH, consumers in US, having had to pay more for products because of the 20% rise in tax (25% now), will stop spending. Is this the factor?

    #3. If jobs are created, spending increases. So how does it lead to a recession?

    What am I missing?
    5% vs. 25% import duty.
    Start with the assumption that consumers aren’t as stupid as politicians, and that they will not buy something if it goes soaring in price. If enough people do that, and demand drops from 100 units to 25, all else being equal there is zero new revenue accruing to the government.

    But, all else is never equal.

    People who used to warehouse, transport, stock, advertise and sell products that people can no longer afford to buy will lose their jobs (or, their overtime or bonuses).

    In a nutshell, making people poorer is a really, really stupid economic policy position.

    Jobs.
    Comparing 2001-05 to 2017-mid-2018 shows the largest share (30.9%) of the increase in job vacancies is in the leisure, hospitality, food service and accommodation sector. Next up is healthcare and education (21.5% of the new openings), followed by professional and business services (15.3%), retail (12.5%) and government (10.6%). Construction (3.1%) and manufacturing (6.1%) barely register, except in the political rhetoric.
    Attached Images Attached Images  
    Trust me?
    I'm an economist!

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    A Self Important Senior Contributor troung's Avatar
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    Trump says the US 'will pay nothing' to Turkey for the release of detained pastor
    Published 16 Hours Ago Updated 15 Hours Ago
    Reuters
    The U.S. warned Turkey to expect more economic sanctions unless it hands over detained American pastor Andrew Brunson, as relations between the two countries took a further turn for the worse.
    President Donald Trump said the U.S. "will pay nothing" to Turkey for the release of Brunson.
    US President Donald Trump speaks during a Cabinet Meeting in the Cabinet Room of the White House on August 16, 2018 in Washington, DC.
    Oliver Contreras | Getty Images
    US President Donald Trump speaks during a Cabinet Meeting in the Cabinet Room of the White House on August 16, 2018 in Washington, DC.
    U.S. President Donald Trump said on Thursday the United States "will pay nothing" to Turkey for the release of detained American pastor Andrew Brunson, who he called "a great patriot hostage."

    "We will pay nothing for the release of an innocent man, but we are cutting back on Turkey!" Trump said on Twitter.




    The U.S. warned Turkey on Thursday to expect more economic sanctions unless it hands over Brunson, as relations between the two countries took a further turn for the worse.

    U.S. Treasury Secretary Steven Mnuchin assured Trump at a Cabinet meeting that sanctions were ready to be put in place if Brunson was not freed.

    "We have more that we are planning to do if they don't release him quickly," Mnuchin said during the meeting.

    The United States and Turkey have exchanged tit-for-tat tariffs in an escalating attempt by Trump to induce Turkish President Tayyip Erdogan into giving up Brunson, who denies charges that he was involved in a coup attempt against Erdogan two years ago.

    "They have not proven to be a good friend," Trump said of Turkey during the Cabinet meeting. "They have a great Christian pastor there. He's an innocent man."

    Trump's national security adviser, John Bolton, had issued a blunt warning to Turkish ambassador Serdar Kilic when he met him on Monday at the White House, an administration official said on Thursday.

    When Kilic sought to tie conditions to Brunson's release, Bolton waved them aside and said there would be no negotiations.

    "Release Brunson," Bolton told him, according to the official, who declined to be named.

    Turkey has sought to persuade the United States to spare Turkey's state-owned Halkbank from a threatened fine for allegedly helping Iran evade U.S. sanctions. Ankara also wanted Washington to hand over Turkish cleric Fethullah Gulen, who lives in Pennsylvania and who Turkey suspects of plotting the coup against Erdogan. Gulen denies the allegations.

    "They missed a big opportunity. This is very easy to resolve," the administration official said. "They made a big mistake trying to tie this to other things."

    The dispute over Brunson and other frictions between Washington and Ankara have been one reason the Turkish lira has plunged 40 percent this year.

    Investors also fret over Erdogan's influence over monetary policy.

    The lira lost strength after Mnuchin's remarks.

    Trump, who has doubled steel and aluminum tariffs on Turkey, said the steel tariffs had kicked in and the aluminum tariffs would take effect soon
    https://www.google.com/amp/s/www.cnb...r-brunson.html
    To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway

  14. #14
    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by Josh View Post
    Congress and the Federal Reserve System, economically speaking. Turkey recently changed their constitution allowing Erdogan far wider powers than a US president.
    Didn't stop him imposing tariffs on the rest of the world. We will discover these limits more with time if there aren't any existing examples

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    Turbanator Senior Contributor Double Edge's Avatar
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    As a bargaining chip, the pastor for Gullen ? not going to work

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