So they’d have to cut back on their lending

19 Mar

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Turkey’s economy looks like it’s headed for a big crash

cheap replica handbags (Adem Altan/AFP/Getty Images) cheap replica handbags

Wholesale Replica Bags It might seem strange to worry about an economy that grew 7.4 percent last year, but despite or rather, buy replica bags because of that good news, Turkey is showing all the classic signs replica wallets of an emerging markets crisis. Wholesale Replica Bags

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aaa replica designer handbags But even though there are no good choices here, there are worse ones. Higher rates might slow the economy down enough that some companies would get into trouble, but a weaker currency would make that even more likely by increasing their debt aaa replica bags burdens, potentially setting off a self fulfilling panic. Foreign investors, after all, would pull replica bags online even more money out of the country if they saw Turkish businesses going under they’ve already replica bags from china been moving it out in response to the Federal Reserve’s rate hikes that have made holding money in the United States more attractive which would then push their currency down even more, and, as a result, send bag replica high quality even more companies into default. aaa replica designer handbags

Handbags Replica The prospect of this, of course, would make it hard for the Turkish banks that would be on the hook for these losses https://www.buycheapluxury.com high end replica bags to borrow money themselves. So they’d have to cut back on their lending, and maybe even get a bailout a bailout that, if history is any guide, would probably require them to, yes, increase interest rates to try to stabilize the currency. It would be better, then, to skip all that extra pain, and just get the rate hikes out of the way now. Handbags Replica

high quality replica handbags It’s not clear if they will, though. high quality replica handbags

Fake Handbags The problem is that Turkey’s increasingly autocratic president, Recep Tayyip Erdogan, has a bad habit of mistaking correlation for causation. In particular, he thinks that low interest rates cause replica bags low inflation, which, as economist Andy Harless has put it, is akin to believing that umbrellas cause replica designer backpacks rain. Low inflation, you see, allows central banks to keep interest rates low, but that doesn’t mean that keeping interest rates low will lead to low inflation. The opposite, actually. Erdogan, though, apparently hasn’t noticed. Empirical reality best replica designer bags doesn’t seem to interest him as much as the one he’s trying good quality replica bags to create. And so he has insisted that high interest rates are the “mother cheap designer bags replica and father of all evil” and that anyone like, say, their central bankers who tries to force them on the country is guilty of “treason.” Fake Handbags

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Fake Designer Bags But it’s hard to tell yourself that anymore. That’s because Erdogan seems no less committed to his wacky theories today high replica bags than he did before the election. He just appointed his son in law to run the country’s finance and treasury departments what sure looks like a rubber stamp in human form and, high quality designer replica after giving himself the power to choose the country’s top central banker, he “predicted” that “in the period ahead I believe that we will see that interest rates also fall.” It luxury replica bags was enough to send the Turkish currency, the lira, down another 6.5 percent this week alone to bring it 23.7 replica bags china percent lower than it was at the start of February Fake Designer Bags.