Turkey is Voting for Christmas

If you think that the UK has it bad right now with (add in your own worry + INFLATION) spare a thought for Turkey which is going downhill rapidly.

If you think that UK inflation of 5 or 6 percent is bad, trying living in Turkey. They’ve had a rubbish end of the year with their currency losing lots of value – just every day, falls and falls and falls.

(I originally wrote the draft for this article at 15:1, then 18:1 and 20:1 and finally at 23.6 Turkish Lira to £1). It started the year at around 10.5:1 by the way – so imagine losing half of what your wealth or income or pension? That would destroy me and the locals are struggling to adapt and survive.

Collapsing Currency

Turkey – what do you know?

I’ve been to Turkey a few times and really enjoyed it, first in 2003 and more again a few times recently. It’s a fascinating place – a proper crossroads between East and West (an overused phase in my opinion) but also north and South (not used that much). One time when the lady and I were on holiday, the street hawkers tried getting our attention using at least 6 different languages – putting monoglot Brits to shame!) The country is poorer than where I’m from but then again not that poor. You can see as many Ferraris as fezzes on the streets of Beşiktaş. The country is vast and diverse with a rich tradition in delicious food, and the people are friendly and welcoming and It was the first place I’ve even been a millionaire, (back when £1 = 2 million Lira). In the mean time they dropped off 6 zeros from their currency but the way things are going it’ll be back in the hundreds or thousands before long.

Turkey is seen by some as an early retirement location by the way and a friend of mine has retired there – maybe not early but certainly retired.

Turkey’s Coming Home to Roost

Who knows what’s going on there? Why is the cause of Turkey’s currency crisis? Is it the persistent trading deficit? Is the poor management by Erdrogan, his cronies and their unorthodox ideas about interest rate policy and economic war? Is it a case of capital flight snowballing into a debt crisis?  Or maybe Trump-era trade tariffs hitting exports on steel and metals.

Ordinary People

Spare a thought to poor Turkish workers and pensioners on a fixed income who are properly screwed by current events. The inflation that the UK is seeing are nothing compared to what must be going on in Turkey. The government would appear to not have a handle on what’s going on. And this isn’t an attack on the authoritarian government of  Recep Tayyip Erdoğan  because I’m pretty sure that money markets doing care about the political leanings of countries as much as the economic leanings.  The government though, have been promising an economic boom that has not materialised and the popularity of the ruling elite is declining. The Central Bank had tried to stop the currency slide but the money market called its bluff and the country is losing lots of money and the situation is getting worse every day. However, if there’s one thing we all know about authoritarians is that a bad economy and collapsing currency are just reasons to cling onto power every more forcefully. In the meantime, Turks will be looking to hoard hard currency, flog their belongings and sell off the family silver (and gold) to pay for the necessities and just to get by. It’ll be a long hard winter for many.

Be Grateful

Inflation may be up a bit in the UK but it’s been an easy slide for the last 20 years. Prices have generally gone downwards, living standards have gone up, cost of debt has plummeted and the currency (despite a few wobbles) has not affected people day to day. You don’t see people swapping their pounds for dollars or pensioners begging on the street or hoards of workless people idling in town centres. These things happen in other countries and are happening right now. We’re lucky to be removed from it – so when you are tucking into your roast bird this Saturday, spare a thought for Turkey and people there who through no fault of their own are suffering.

Thanks and Merry Christmas, GFF.

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