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Erdogan Melts Down Over Lira Collapse, Trump Tariffs

Erdogan discovers that Trump is not Obama

In July of 2016, there was a coup attempt against Turkey’s president, Recep Tayyip Erdogan, by elements within the Turkish military. The coup attempt failed and Erdogan responded by launching a huge purge of all his domestic opposition, rounding up and imprisoning thousands and firing and dismissing tens of thousands more from state positions.

Erdogan accused a political opponent, Fethullah Gulen, of being behind the coup attempt. Gulen is currently living in the Pennsylvania region and has been since 1999. It remains unclear whether the coup was simply a convenient excuse for Erdogan to go after Gulen, or whether “Gulenists” actually were the ones to organize the coup.

The United States has been unwilling to extradite Gulen, reportedly because Erdogan has never provided the US government with convincing evidence that Gulen actually organized the coup. The massive purge and crackdown on domestic opposition likely also damaged US confidence in Erdogan’s honesty regarding the matter of Gulen as well.

Erdogan arrested an American pastor living in Turkey, Andrew Brunson, in 2016. Ostensibly, the reason for the arrest was that Brunson was a terrorist and involved with the “Gulenist” movement. I find this arrest highly questionable and believe he was arrested to put pressure on the Obama administration (and later the Trump administration) to hand over Gulen to the Turks.

In other words, I believe the Turkish government kidnapped Brunson to hold him for ransom. This is a common practice in the Middle East, where Americans are periodically targeted by foreign governments for harassment and kidnapping.

The Trump administration has been working for some time to try to free the kidnapped pastor. In July, Mr. Trump cut a deal with Erdogan for the release of the pastor. In exchange for asking Israel to release a Turkish citizen who had been arrested for smuggling funds to Hamas, Turkey would finally release the kidnapped pastor.

The problem is that Erdogan welched on the deal, and refused to release the pastor after Trump held up his end of the bargain. The response of the Trump administration has been to crack down hard on the Turks with tariffs. Erdogan, as is typical for him, responded by throwing embarassing, babyish public temper tantrums all weekend:

In the wake of the U.S. doubling tariffs on Turkish steel and aluminum on Friday which sent the Turkish lira and capital markets into free fall, Erdogan wrote a Friday New York Times op-ed cataloging his grievances and threatening to walk away from the decades-old alliance. “Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies,” he wrote. Meanwhile, while announcing the new sanctions aimed at Turkey, Trump tweeted his “analysis” of the situation: “Our relations with Turkey are not good at this time!”

The escalating war of words continued on Saturday, when speaking at a rally in the Black Sea town of Unye, Erdogan said that “it is wrong to dare bring Turkey to its knees through threats over a pastor,” and blasted “shame on you, shame on you. You are exchanging your strategic partner in NATO for a priest.” At the same time, Ibrahim Kalin, Erdogan’s spokesman, said that the U.S. is “facing the risk of completely losing Turkey.”

And if anyone was hoping that Erdogan’s temper would have cooled one day later with just hours left before FX markets reopen, they were sorely disappointed on Sunday when in his latest public address in the town of Trabzon, Erdogan doubled down on his belligerent rhetoric against the US once again, via Bloomberg:

  • ERDOGAN: WE SEE THE GAME YOU’RE PLAYING; WE DARE YOU
  • ERDOGAN: THEY’RE TRYING W/ MONEY WHAT THEY COULDN’T DO IN COUP

Here one assumes that by “they” Erdogan was referring to the US, even though the Turkish’s president official line all along was that the culprit behind the “failed coup” was the exiled cleric Fethulah Gullen who has been accused by Erodgan of being behind the country’s imaginary “shadow state” for years, and which gave Erdogan a green light to crackdown on any potential opponents, leading to an unprecedented purge of people in public positions, with tens of thousands of government workers either ending up in prison or unemployed.

Finally, anyone wondering which way the Lira will open later today, Erdogan did his best to make the ongoing collapse accelerate, stating that “we know very well that those who say we should make an agreement with the IMF are saying we should give up on political independence“, thus eliminating the possibility of an IMF bailout which together with capital controls were the only two options Turkey had left to arrest the lira’s plunge.

Erdogan doesn’t seem to be very bright. Obama and Bush would have certainly both rolled over for him, but President Trump is a different man, as the Iranians. the Canadians, and the Chinese have all been finding out. A Wall Street Journal article from this weekend made it clear that the Trump administration’s strategy for dealing with Turkey was “a bullet a day” until the pastor is released.

The more I’ve investigated Turkey’s situation, the more I’ve found it to be similar to Venezuela’s. The Turkish economy has been propped up by a mixture of forced devaluation of the currency, the lira, to help boost exports along with a huge amount of social spending to keep the population pacified. The country is also being hammered by high oil prices.

These policies have started to generate a currency crisis. Much like other socialist fanatics, Erdogan has refused to back down, and the lira’s plunge is now beginning to result in a major economic crisis. Rather than face reality, the paranoid Erdogan has begun spouting a conspiracy theory that he is the victim of a secret “economic war” being waged against him by the United States.

Socialist idiots, of course, will eagerly eat up these conspiracy theories. They have in the case of Venezuela, which blew up its economy nearly the same way Erdogan is doing and used the same kind of over the top, insane rhetoric.

Assuming he continues to refuse to change course, the next steps for Erdogan will be to seize the country’s remaining wealth by expropriating businesses and banks, and impose capital controls. Stockpiles of dollars and gold will probably be seized by the Turkish government. This will give them at least a few more months and maybe as long as a couple of years depending on how prudently Erdogan manages the money he steals.

Erdogan is making a lot of noises about leaving his “alliance” with the West. The problem is that Turkey’s alliance with the United States has been effectively dead since 2003, when he refused to let the US use Incirlik airbase to invade Northern Iraq, which was one of the principal causes of the long guerrilla war that erupted after the fall of Baghdad. Furthermore, Erdogan has repeatedly threatened US troops at Incirlik airbase.

I am doubtful that Erdogan will be able to conclude any kind of alliance with Russia or China. While those countries might make nice with Turkey to tweak our noses, when Erdogan finishes squandering the country’s wealth and plunging Turkey into Somalia and Venezuela-like poverty, they aren’t going to have very much the Russians and the Chinese want. The Chinese, notably, have cut off funding to Venezuela. We can expect the same response once Turkey finishes destroying itself.

To sum up, I think we can expect Trump to keep turning the screws on Erdogan until Erdogan caves in, or until his ramshackle economy collapses. Given how troubled the Turkish economy is and Erdogan’s refusal to change course, I don’t think that will take long.

 
Doomberg

Written by Doomberg

I am Doomberg, one of the original founding members of Sparta Report, and have been here since the beginning. I am an insatiable news junkie and enjoy reading and writing about the US territories, the Caribbean, video games, smartphones, and of course conservative politics in general.

I also really like pictures of gas stations and claim full responsibility for the silly gas station motif. I'm presently trapped behind enemy lines in a blue state with no hope of escape! The ride never ends.

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