Trump Sanctions NATO ALLY Turkey, Lira Dives 2.1% to Record Low

The Lira is under heavy pressure from Trump today, but Turkey's problems have been escalating for years.

Bloomberg reports Lira Falls to Record as U.S. Sanctions Turkey.

The lira slumped to a record low as the U.S. imposed sanctions on two Turkish ministers over the continued detention of an American pastor.

The sanctions target Turkey’s Minister of Justice Abdulhamit Gul and Minister of Interior Suleyman Soylu, both of whom “played leading roles in the organizations responsible for the arrest and detention of Pastor Andrew Brunson,” the U.S. Treasury Department said in a statement. The currency slumped as much as 2.1 percent to 5.0157 per dollar after two people familiar with the matter said the U.S. has prepared a list of Turkish entities and individuals to target should it decide to impose sanctions on Recep Tayyip Erdogan’s government.

Lira 15-Minute Chart

Turkey's problems go back a decade.

Lira Monthly Chart

In 10 years the lira plunged 76.74% with the bulk of the decline starting January 2013. It closed 2012 at 1.7589. That's a 64.79% decline in 5.58 years.

Trump Demands Turkey Free US Minister

The US wants Turkey to release protestant minister Andrew Brunson who is charged with "acting on behalf of two groups deemed by Turkey to be terrorists."

Brunson has been under house arrest in Turkey since October 7, 2016.

Erdogan Accuses US of ‘Zionist Mentality’

Turkish President Recep Tayyip Erdogan Accuses US of ‘Zionist Mentality’.

Turkish President Recep Tayyip Erdogan on Wednesday vowed his country would not give into threats from the US over the case of an American pastor being tried on terror charges, accusing Washington of showing an “evangelist, Zionist mentality.”

“It is not possible for us to accept that America gets up, especially with an evangelist, Zionist mentality, and uses this kind of threat-filled language,” Erdogan added.

Erdogan Demands US Return Turkish Cleric Fethullah Gülen

As part of the complicated mess, Erdogan Demands Gulen Extradition for US Pastor’s Release.

Speaking in a live interview on the Turkish NTV news channel on April 21, the Turkish president claimed “the US is behind [Gülen],” the Muslim imam he accuses of masterminding a deadly coup attempt in July 2016 to overthrow his elected government.

“If you are not giving him to us, then excuse us,” Erdoğan said, “but from now on, whenever you ask for another terrorist, as long as I am I office, you will not get them.”

The United States has denied repeated requests for Gülen’s extradition, citing a lack of sufficient judicial evidence of his involvement in the failed coup.

Nutshell

In a nutshell, Erdogan arrested Brunson hoping to force the US to release Gulen in exchange.

Charges of terrorism against both are ridiculous. Edrogan refuses to give the US evidence.

Death Penalty

Also note, Erdogan Ready to Approve Law on Death Penalty if Passed by Parliament.

That is against EU law.

Tensions will rise. Erdogan may flood Greece with refugees.

US Military Bases in Turkey

What's Next?

If Trump presses Turkey hard enough, Erdogan may shut down Turkish air space to the US or take over US missile bases and military bases.

Turkey on Venezuela's Path

  1. Erdogan jailed political opponents
  2. Parliament effectively made Erdogan prime minister for life
  3. Erdogan took over the press
  4. Erdogan took over the courts
  5. Erdogan took over finance
  6. Erdogan about to take over the central bank

Hyperinflation Path

Venezuela did not hop straight into hyperinflation and Turkey likely won't either.

However, if Turkey remains on the same path, which seems highly likely, hyperinflation is the inevitable outcome.

For discussion, please see Spotlight Turkey: Hyperinflation and Mass-Migration Crisis Inevitable.

Mike "Mish" Shedlock

Comments (9)
No. 1-4
2banana
2banana

Why is Turkey even in NATO? Aid and comfort to ISIS, use of "refugees" as a weapon, zero freedom, totalitarian islamic state...etc.

As for taking over a US military base - go ahead and play that card. The US can recognize a Kurdish State of the eastern half of Turkey, enforce a no fly zone and open a new airbase there.

Greggg
Greggg

I'll bet it has more to do with Ergodan's recent criticism of apartide laws enacted by Israel. Gulen has been in Turkey's agenda for years.

Greggg
Greggg

This was posted on NewsBud and was also posted on youtube.

Stuki
Stuki

Developments in Turkey are just plain worrisome. Turkey is basically well on their way from being 80/20 European/Middle Eastern culturally/politically, to reversing that ratio. With all the implications this has for the stability of all those surrounding them.

As unpalatable as a Brussels ran military may seem; Europe will have no choice but to take more responsibility for their own defense, if/when they can no longer rely on a superpower aided Turkey acting as a buffer between them and the powder kegs to their East.

America could probably stabilize Turkey for awhile (The Saudi way; Benzes; along with advancement opportunities in a prestigious secular Army; for every military aged male...), where it not for America being bankrupt. Russia straight up benefits from the place going up in ever larger plumes of smoke; as this increases demand for both Russian oil and weapons. As well as demand for Russian security services helping provide some stability in the region. So, Europe is on their own this time. For the first time since WW2.