Real Estate Profitsinvesting in turkey

investing in turkey


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Turkey is in trouble and I mean big trouble the country that was once hailed as one of the top emerging economies of the century has begun to sink into unfathomable despair How Deeply is it sinking well this much turkey’s sky-high inflation rate continues to climb inflation in turkey has reached nearly

80 percent annually in June it’s annual inflation at over 80 percent for August that’s meeting a 20-year High turkey’s president erdogan is at the reins of what appears to be a sinking ship what makes this interesting is that for the large part he and his administration are

To blame having risen to power based on economic reform and growth it’s clear that his reforms are not working out as expected in the next few minutes I’ll go over why exactly Turkey’s economy is struggling this badly what to do about it and how this can turn into a global

Conflict with the potential to drag the U.S into it speaking of dragging third parties into this it’s been hard to find sponsors for my videos because apparently the topics are too controversial so I’ve decided to sponsor my own videos more details later in this video for now please hit that

Like button to help out this video in the algorithm turkey whose emerging economy continues to Boom gross domestic product grew more than expected and even in these times of economic uncertainty hit maximum velocity reaching nine percent second only to China putting up new skyscrapers planning a third Bridge

Across the Bosphorus they’re growing at a very fast clip low interest rates in a more competitive exchange rate to boost construction and manufacturing companies turkey is able to really dominate many of the markets practice and shopping malls Turkey’s economy has never looked so good this article by Bloomberg came out in

2018 it hailed turkey as one of the most attractive emerging economies and it forecasts a big bright future for the nation fast forward to half a decade later and quite honestly Turkey’s economy is in the gutter the nation can barely keep a lid on its inflation rate

Which has soared up as high as 58 according to the official count unofficially though the actual inflation is reported to be over twice as high and that’s hitting the citizens hard couple that with a currency that has seen better days and what you have left is an

Economy that is a shadow of what it once was gone are the days of projecting amazing growth for turkey all we have left now is the hope that it can stay afloat the question then becomes what happened what went so wrong let me answer that right after we go over the current

Earthquake that happened in turkey turkey and Syria have faced one of the worst set of 7.8 catastrophic earthquake it’s turkey like a wrecking ball some seven and a half thousand or so buildings have been totally destroyed the Death Star now passed 21 000. rescue teams are still trying to find survivors

More than 90 hours after the Quakes time is running out to rescue people in turkey and Syria who are trapped in the rubble and many more desperately need water food medicine and shelter no one knows how the situation will continue to develop on February 6 2023 turkey and Syria were

Hit with a 7.8 magnitude earthquake making it the worst earthquake turkey has experienced in modern history as you just saw in the clips from earlier many lives were affected and many people are still suffering as of the writing of this script more than 20 000 deaths have been reported and a

Large winter storm has slowed down rescue efforts tremendously so to help out I’m going to open a fundraiser where we can all donate towards the rescue efforts and help out the people in need the fundraiser link should be right below the video and I’ll be donating the entire sponsorship money from this video

To that fundraiser talking about the sponsor it’s actually my own geopolitics newsletter Global Recaps I was tired of YouTube and other sponsors deciding what news is controversial and what isn’t every time YouTube deems something too controversial it would Age restrict the video and kill its reach so now with

This newsletter I can send important geopolitical news directly to your inbox without any third parties suppressing the reach best part is that it’s completely free and you can sign up now through the link in the description now let’s get back to talking about Turkey’s economy let me start with what the average

Person can see and is affected by money back in 2018 when everyone was singing turkey’s praises the Turkish lira Turkish currency was pegged at just around 3.7 to the US dollar fast forward to today the Turkish lira is just under the 19 Peg Mark to the US dollar

There has been a nosedive of the currency as it has gone right into the garbage tray a lot of this economic tumble has occurred within the last year or so back in 2021 the Lira was pegged around eight to the US dollar do you know how low you have to fall for

This to move from eight to nineteen within 12 months what this reveals is that this is a burning fire that cannot be contained you can imagine what this rapid downfall has done to local economies and structures in economics you can learn that a falling currency is expected to

Create inflation by driving up the price of imported goods and services this triggers what economists call exchange rate pass-through so basically when currencies fall and value things bought from abroad become more expensive with most countries importing Goods such as fuel materials or technology weaker currencies mean higher prices it’s economics 101.

But well if you’re Turkish you don’t have to go to school to learn that a short trip to the market will educate you the lira’s devaluation has resulted in inflation soaring up high in such a short space of time this line graph can do your eyes Justice

To see just how high the inflation rate has skyrocketed at present turkey now has one of the highest inflations of any of the large European economies what makes it even worse is that these figures I’m reporting came after months of inflation coming down it has at times

Peaked at record highs of 85 and a half percent but again these are the official propaganda rates many independent analysts including those at enag have estimated that the annual CPI inflation was in fact 176 percent when you look at the increase in food prices in Turkey it’s

Hard to argue this point anything less would not correlate with what’s going on on the ground erdogan has basically created an environment in which it’s impossible to flourish businesses are still suffering which is further bringing the economy to a standstill it’s a cycle that is unending where policy affects businesses and businesses

Can’t feed into the economy this leads lawmakers to implement new policies and it goes on and on a lot of companies in construction real estate and energy have struggled to contend with a weak Lira and the banks that Finance them have also felt the same pain large companies

Have reported losses in the billions per quarter at instances since this economic decline began Turk Telecom a big telecoms group is one of them what turkey is experiencing should be called what it is a full-blown currency crisis as these businesses suffer so too do the employees who work for these

Corporations this is why it’s not surprising that in recent years turkey has suffered a major brain drain that continues to take place in fact every year turkey has been losing over 300 000 young skilled workers as people seek to start a new life somewhere else in a localized poll that was done most

People stated that the reason for leaving was either tied to erdogan’s political or economic policies that made life in Turkey hard and unpredictable one thing is certain losing the young and educated has long lasting ramifications for turkey Turkey’s economy will lose big on the jobs and businesses these individuals could have

Created and with the nation on its knees losing Human Resources is not what it needs right now Foreign but surely the president officials and Regulators in Turkey are seeing what is happening aren’t they why aren’t they taking action these might be questions you might ask yourself let me answer them by showing you this Turkish firing three monetary policy makers wary of cutting interest rates but the nation’s

Central Bank governor no official reason was given for the firing but erdogan has expressed frustration with the central bank for keeping its Benchmark rate at 24 does that answer your questions it’s not that no one can see what’s happening in the country it’s just that the problem lies in the president erdogan

I’ll explain why in just a minute let me give you some background first many believe that part of the problem was with turkey’s rise in the first place the nation took several risky gambles and when they worked the country boomed when they stopped working well everything fell apart a good reason for

This is for the longest time turkey operated in a large current account deficit this means that its Imports were far more than its exports how is this relevant well a country running a large current account deficit is always at risk of seeing the value of their currency fall if there is insufficient

Capital flow to finance the deficit the exchange rate will fall to reflect the imbalance of foreign flows of funds this is exactly what happened with turkey one small Hiccup and the exchange rate fell to reflect the true State of Affairs this is what brought about the inflation

But you know inflation can be managed right here in the US we saw interest rates being increased to curb the inflation that at seven percent was getting far too high for our liking higher interest rates reduce economic activity which then gives the economy time to breathe as it did with the US

Can’t turkey just do the same well short and long answer they could but they won’t in fact turkey has done the opposite it has lowered the interest rates further leading the economy to spiral out of control but why would anyone do that are they consciously attempting economic suicide well no the

First thing is that turkey’s president erdogan has a deeply religious background as a practicing Muslim who attends religious vocational schools he leads with his religion in mind this would typically be fine except the small difference in how he views monetary matters you see he views lending money at

Interest as sinful and so he continually advocates for the lowering of interest rates yikes not what you want to hear from your financial Authority and in the same breath those very low interest rates are favored by real estate companies who have historically been large backers of erdogan’s AKP

Party this mixture of religious and political motivations is why erdogan consistently keeps interest rates low anyone who opposes him tends to lose their job as has been the case with several Governors you see the Central Bank of turkey is not independent of the government unlike the case in most

Countries what this means is that essentially they all danced air to one’s tune hence he can do this any time he pleases I don’t know about you but that doesn’t seem like a very sustainable way for an economy to operate history has revealed that it’s never

Wise for a leader to have no checks and balances and based on the fact that Turkey’s economy is collapsing as Governor after Governor leaves office then well it’s safe to assume that turkey needs a drastic shift if it’s going to survive this storm the centralization of power in the hands

Of erdogan might be the center of all of this Havoc so will things stay the way they are will the Turkish economy recover maybe but that would require a drastic change in an approach that erdogan might not be comfortable with but there is a glimmer of hope for the

Turkish population because this year elections are going to be held in Turkey given the let’s call it displeasure that the masses have it’s quite reasonable to think that this election might give erdogan a run for his money I think he himself knows this because the president has begun underhanded

Tactics against his political Rivals he has even gone so far as to arrest the mayor of Istanbul under the allegations of insulting officials and drafting controversial media laws that criminalize disinformation it is clear that the president sees matters going unfavorably for him however elections are unpredictable especially given the kind of power

Erdogan holds so we’ll just have to wait and see turkey at present is one of the top 20 largest economies in the world a fall of such an economy cannot occur without Global repercussions that’s why it is in our best interest that turkey bounces back

How this will occur I don’t know but I definitely will be keeping a close eye on the situation as always

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