Among the many market-related geopolitical stories playing out in the background this week, you’ll find Turkey and the case of the beleaguered lira (more here), which plunged to an all-time low earlier this month amid concerns that Erdogan’s desire to keep juicing the economy is going to make it well nigh impossible for the central bank to get ahold of inflation and put the brakes on the FX spiral.
Obviously, Erdogan has a history of this – he’s the self-declared “enemy of interest rates” and although “interest rates” can’t technically be thrown in prison, the people who set them can, which is one reason why no one wants to cross that fucking lunatic when it comes to getting too hawkish even as the market punishes the lira for Erdogan’s strategic transgressions.
And it’s not just interest rates. Erdogan has other “enemies” too – like Kurds, and opposition politicians, and that scheming bastard Fethullah Gülen in Pennsylvania, and most especially, checks and balances. Erdogan has managed to do away with checks and balances but that won’t be official until the next election and wouldn’t you know it, Bahceli and MHP are calling for polls to be moved up, all the way from the currently scheduled November 2019, to August 26.
Erdogan’s going to think about it, because you know, that’s his “duty”. “The AK Party has a tradition of holding elections on time, and we had stated that the vote will take place as scheduled, but authorized party organs should evaluate this and it will be debated,” Deputy PM Bekir Bozdag said Tuesday.
The discussions will be chaired by Erdogan and after he decides whether this is a good gamble or not, someone will apparently let you know.
Markets didn’t love this. The lira reversed gains as the headlines started to come in:
And the Borsa Istanbul quickly pared gains before falling sharply: