Recently, a series of operations by the Central Bank of Turkey have become popular on the Internet. Due to the sharp depreciation of the currency and the increase in global commodity prices, Turkey CPI has approached 80%! In the face of inflation, the Central Bank of Türkiye announced an interest rate cut of 100 basis points.
Is this learning from the United States?
The United States has just passed the $750 billion "Inflation Reduction Act" to print money to fight inflation. Friedman can't hold it down anymore. However, the United States is trying to sell itself like sheep, and its real purpose is to contain China. Türkiye is actually setting itself on fire.
This is not the first time that Turkey’s economy has collapsed. It collapsed once five years ago. At that time, foreign debt exploded, foreign exchange reserves were significantly lost, and the currency collapsed directly.
is now nothing more than a continuation of the crisis. Last year, Türkiye's inflation exceeded 40%, but after deducting inflation, the economy still grew. At that time, many people boasted that the economy was growing.
However, this is a ruthless plunder of the middle and lower classes. The reason is very simple. The wealth of the middle and lower classes is mainly based on labor income and savings. What do you think if your wealth shrinks by 50% a year?
As for the upper level, the layout of wealth is mainly based on stocks, and the other is globalization. Türkiye’s stock market just hit an all-time high!
I think Turkey is a typical country that has fallen into the " middle-income trap". The per capita GDP was once as high as 15,000 US dollars. Now that it has returned to its original form, we should learn from it!
