Erdogan destroys Turkish economy, Internet censorship won’t help

This 13 August 2018 video says about itself:

Turkey claims social media accounts are ‘provoking’ crash of the lira

The Turkish government is taking legal action against hundreds of social media accounts which they claim has ‘provoked’ the ongoing plummet of the lira.

Turkey’s Interior Ministry said it has initiated legal investigations against 346 social media accounts ‘which posted content provoking the dollar exchange rate.’

The lira has lost more than 40 per cent against the dollar this year, largely over worries about President Erdogan‘s policies.

Well Mr Erdogan, if you wage expensive bloody war on your own people; on the people of Syria; on the people of Iraq; then it is not that surprising that the Turkish economy (and maybe other countries’ economies) gets ruined. You should look at the man in the mirror instead of blaming Turkish people reporting facts on the Internet and censoring them.

From daily The Morning Star in Britain:

Monday, August 13, 2018

Erdogan targets ‘traitors’ undermining the lira

TURKISH President Recep Tayyip Erdogan accused “traitors” today of accelerating the collapse of the lira and vowed that they would pay the price.

Mr Erdogan said unpatriotic Turks were spreading “economic terror” through social media accounts reporting on the currency’s plunge, which resulted in it falling further.

The Interior Ministry confirmed that it was opening investigations into 346 social media accounts “which posted content provoking the dollar exchange rate”, while the Istanbul Public Prosecutor’s Office said it was targeting “those who had taken actions which threatened economic stability.”

The Capital Markets Board of Turkey issued a similar warning to those who spread “lies, false or misleading information, news or analysis.”

The Turkish Central Bank has so far declined to raise interest rates, a standard way of slowing inflation. The lira has now dropped by 45 per cent against the dollar this year, with a further fall of 7 per cent yesterday following Friday’s disastrous 14 per cent drop.

The president has called on his fans to exchange dollars for rapidly depreciating lira to shore up the currency, but the response has not been enthusiastic.

He also took aim at the United States yesterday, saying tariffs it has doubled on Turkish aluminium and steel constituted an “economic siege” and a “stab in the back”, considering that the countries are Nato allies.

The tariffs are a response to Ankara’s refusal to release US pastor Andrew Brunson, whom it accuses of having links to US-based cleric Fethullah Gulen and the Kurdistan Workers Party.

This 10 August 2018 video is called What is behind US sanctions on Turkey?

From daily News Line in Britain:

Tuesday, 14 August 2018

Stock markets crash as ‘contagion’ from Turkish currency collapse spreads to world banks

Last Friday the Turkish currency, the lira, crashed spectacularly, dropping as much as 16% relative to the dollar – it lost a third of its value in just one week. By Monday morning the world’s central bankers and financial institutions were suddenly waking up to the carnage that the collapse of the lira means for capitalism.

The economic crisis that is laying waste to Turkey is not some localised problem and Turkey is not an insignificant little country. With a population of 80 million, its economy is four times greater than Greece, while its geopolitical importance in the region has long been recognised by the imperialist powers who have courted its president Recep Tayyip Erdogan as an ally in the imperialist war against Syria.

Now this former ally is posing the greatest threat to the stability and future of the world’s banks.

This became clear on Monday morning when shares in European banks fell dramatically as traders feared ‘contagion’ from the collapse of the lira would inevitably hit them, as they hold huge sums of Turkish debt that will never be repaid.

Right in the firing line are Spanish banks that hold $82.3 billion of Turkish debt, followed by France with $38.4 bn, the UK holding $19.2 bn, the US $18 bn, Germany $17.1 bn and Italy with $16.9bn. With the European banks already teetering on the brink of bankruptcy, a default on their dollar loans by Turkish companies and banks would collapse the whole lot – hence the panic that is dominating not just the financial but also the front pages of the bourgeois press yesterday.

Their panic is understandable. Turkey is no isolated case. The country, in the words of one financial analyst, is ‘the canary in the coal mine’ – a portent of what is rapidly emerging in countries across the world as the huge capitalist debt crisis erupts with wave after wave of corporate bankruptcies leading to banks themselves going bust. In order to try and stave off complete collapse of the banks in 2008, central banks in the US and Europe flooded the world with paper dollars and euros, augmented by a policy of near-zero interest rates.

All this cheap money was lapped up by nations and companies, who gorged themselves on debt overwhelmingly in US dollars instead of their own currencies. This has created a huge international financial bubble – according to the Institute of International Finance corporate debt in foreign currencies (mainly dollars) stands at a record breaking $5.5 trillion.

In an effort to deflate this bubble before it explodes, the central banks of the US and Britain have started to slowly increase interest rates. The Fed increased rates by 0.25% last November. The effect of this attempt to avoid a debt bubble explosion has been to cause still another debt crisis, as these corporations and nations that borrowed trillions of dollars now find they cannot afford to pay even the small 0.25% increase making it impossible to service these debts and driving them to default and leaving the banks with nothing but a mountain of bad debt they cannot recover.

So entwined is the capitalist banking system, that a failure in Turkey is quickly being felt across Europe and reaching the US, whose banks are also exposed not just to Turkish debt but to the debt of the EU banks. In 2008, the collapse of one comparatively small investment bank, Lehman brothers, brought the entire world banking system to the point of extinction.

Capitalism could not solve this crisis but only postpone it through creating an even bigger debt crisis and imposing the most savage austerity cuts on the working class in every country. This latest stage in the world crisis of capitalism is much deeper than that of 2008, with the capitalist class attempting to place the burden of collapse again on the working class with even greater savagery than we have seen. This will enormously revolutionise workers across the world as they realise that capitalism has reached the end of the road and that the only way forward is to overthrow it through socialist revolution.

By Bill Van Auken in the USA, 14 August 2018:

Market fears of contagion have turned into a self-fulfilling prophecy around the globe, with India’s rupee hitting a record low, and South African, Mexican, Brazilian and other emerging market currencies falling sharply. Argentina’s government announced late Monday that it was raising its base interest rate to a staggering 45 percent, as the peso also declined to a record low, with fears of greater market pressures lying ahead. …

Erdogan, who was reelected in June, arrogating to himself extraordinary executive powers, issued ominous threats to internal enemies.

“There are economic terrorists on social media”, he told an audience of Turkish ambassadors gathered in Ankara’s presidential palace on Monday. “They are a genuine network of treason.”

Turkish financial regulators have threatened to take legal action against anyone spreading “erroneous and fabricated news and statements.” The authorities have claimed to have identified some 350 social media accounts that are guilty of undermining the lira with “fake news” that contradicts the government’s claims about the strength of the Turkish economy. …

Such threats will quickly translate into repression against the Turkish working class, which will face the brunt of the economic crisis and the measures that the Erdogan government will take to confront it. The international financial markets are demanding that the Turkish central bank raise interest rates—a step that Erdogan has resisted—and that sweeping austerity measures be imposed.

Turkey’s finance minister—who is also Erdogan’s son-in-law—Berat Albayrak said on Monday that Ankara would introduce an economic plan to confront the lira crisis that includes strict budget discipline.

Dutch government prosecuteds man for ‘insulting allied head of state Erdogan‘: here.

The Turkish crisis and the threat of world war: here.

U.S. WON’T DROP TURKEY TARIFFS The U.S. said it wouldn’t remove steel tariffs that have exacerbated the currency crisis in Turkey — even if Ankara frees U.S. pastor Andrew Brunson, who is on trial on terrorism charges. [Reuters]