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Turkey's trade deficit widens to $10.2B in June, double one year ago, and confounding central...

Turkey's trade deficit widens to $10.2B in June, double one year ago, and confounding central bank assurances the gap is coming under control. Despite an overheating economy, the central bank has no plans to hike interest rates, believing such a move would only draw more capital into the country.
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Comments (2)
  • mdmrjsds
    , contributor
    Comments (502) | Send Message
     
    The prosperity in Turkey is being modelled after the US housing bubble. It looks good while it is happening, but it ends badly.

     

    Knowing the pathology should allow money to be made reasonably safely during the bubble.
    29 Jul 2011, 03:34 PM Reply Like
  • mdmrjsds
    , contributor
    Comments (502) | Send Message
     
    The trouble for Turkey is that it is using the Hogwarts' Magical School of Macro Economics as its financial system. That doesn't allow them to deal with this situation properly. They need a system that doesn't allow fractional banking, one where the amount of money created is related to the amount of production from the economy.

     

    What is the Hogwarts' Magical School of Macro Economics? It teaches that the creation of money bears no relationship to economic production. Unlike everyone else, for money issuing governments, there is a magical rule that allows them to create as much money as they want, with no negative effects on the economy. Who belongs to this school? New Keynesians (continuous stimulus), Monetarists, and MMTers. It is astonishing to me that after policy failure after policy failure, we still pay any attention to them at all.
    29 Jul 2011, 03:52 PM Reply Like
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