Policies that induce inflation are a key part of authoritarian schemes.
Turkey’s economy is booming!
Under the ‘amazing’ leadership of President Erdogan, the country reached a 7.4% GDP growth rate in Q3, far higher than in most other countries.
So, what is the secret to Turkey’s surging growth?
A completely insane government destroying the value of their currency.
You see, Turkey’s ‘growth’ is the kind of ‘growth’ you see temporarily when a populace loses complete confidence in their government money, and seeks to desperately spend as much of it as possible before the value drains away.
Erdogan has become more and more authoritarian during his time in office, and has decimated the independence of Turkey’s central bank.
To push ‘growth’, Erdogan has kept interest rates low, even as economic conditions should have prompted rate increases. Rather than allow the central bank to raise interest rates, Erdogan has fired central bankers who sought to restore some sort of discipline and rationality, replacing them with lackey after lackey who would do his bidding and keep interest rates low:
“Lines outside bread stores and gas stations; farmers defaulting on loans; impromptu street demonstrations. The signs of economic distress in Turkey are all too clear as the lira continues a dizzying slide.
Sporadic protests have broken out around Turkey and the opposition parties have called for a series of rallies to demand a change of government after the lira crashed sharply last week. The latest week of turmoil follows months of worsening economic conditions for Turkish citizens. The currency has lost more than 45 percent of its value this year, and nearly 20 percent in the last week, continuing its downward trend on Tuesday.
Economists have tied the currency crisis to President Recep Tayyip Erdogan’s direct interference in monetary policy and his determination to lower interest rates.”
As reported by the NY Times, Erdogan’s interference continues to worsen the situation:
“The latest crash in the currency came after Mr. Erdogan gave a speech last week outlining his determination to keep rates low as a way of promoting economic growth. He reaffirmed his opposition to raising rates again in comments to reporters aboard his plane as he returned from a visit to Turkmenistan on Monday.”
Indeed, On Tuesday, the Turkish Lira hit a new low vs the US Dollar:
“The currency hit a low of 13.47 to the dollar in late afternoon trading, surpassing its previous record low last week of roughly 13.45 to the greenback, following renewed worries over the country’s monetary policy and concerns over the Covid-19 omicron variant.
The lira’s spiral has been staggering — it plummeted from roughly 8.5 to the dollar in late August to more than 13 to the dollar within a mere three months.
Erdogan has consistently refused to raise interest rates to reign in rising double-digit inflation, and the lira has plummeted in value in recent years largely as a result of that. Inflation in Turkey is now near 20%. Erdogan has fired three central bank chiefs for not aligning with his belief that rates should not be raised.
“I have always been arguing for lower interest rates and repeating that the rates should be lower. I have never advocated and won’t be advocating for interest rate increases,” Erdogan was reported by Turkish press as saying on Sunday.”
In a sign of the insanity that authoritarianism generates, over 84 million people are now watching their life savings be decimated by the rampant ignorance of one person:
“Economic experts and former officials in the country have openly pleaded for the president to change course, as it’s commonly accepted that he in fact has power over the central bank’s monetary policy decisions rather than the bank being independent. But Erdogan has long held the unusual belief that higher interest rates cause inflation, rather than bring it down.”
An entire country, an entire nation of people who worked their whole lives to save money and generate value for themselves and their loved ones, are losing all of that.
Turkey’s crypto crackdown
Unsurprisingly – given that Erdogan has long been trying destroy any ability for people to evade his control – the country cracked down on cryptocurrency a while back:
“That speculation came to an abrupt end two weeks ago when Turkey revealed plans to ban these software-based “digital tokens” as a form of payment starting from April 30 in an attempt to combat a flight from the tanking Turkish lira.”
Clearly, Erdogan doesn’t want anyone trying to protect their earning power from his horrendous policies.
Control money, control individuals
What does this have to do with Canada?
Well, let’s consider that Erdogan has long been reducing personal freedom in Turkey, in an attempt to expand his own power.
Why would he be such a fan of inflation?
Because inflation lets him expand the size and scope of government, and reduce the economic freedom of the Turkish people.
Erdogan realizes that taking away someone’s economic freedom also reduces their personal freedom.
If you have fewer financial resources, your political power is significantly reduced, just as autocrats, authoritarians, and communists want.
And here in Canada, we see a continued expansion of government power and inflation that strips away our financial freedom.
Canada’s situation
Justin Trudeau has openly spoke of his admiration for authoritarian Communist States, and has stocked his government with sycophants who share his statist vision.
The past year-and-a-half has witnessed a decisive shift towards further state control and a reduction of personal freedom, so it is no surprise to see that agenda being paired with the reduction of our economic freedom.
Realizing that they are so closely linked, statist politicians like Justin Trudeau & Chrystia Freeland can expand the size of government, induce further inflation, weaken the economic independence of Canadians, and thus further expand their power.
That’s why inflation should be viewed as more than just an economic issue, but also an issue intrinsically linked to our personal rights & freedoms.
Without our economic freedom and prosperity, our individual freedom will be eroded even more, and Canada will become a more and more authoritarian place.
For this reason, Sound Money and cryptocurrencies like Bitcoin are essential to defending ourselves against governments that debase our money.
“Erdogan’s Turkey is fast becoming a case study of bitcoin’s potential benefits for residents of countries with fragile currencies, or authoritarian leaders likely to pursue short-term political gain through inflationary policies.”
Spencer Fernando
Photo – YouTube
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