TR Economy & Updates

[Huelague]

I think it will be easier to deal with exchange rates in the future as other economies are not doing better than we are.

Can you explain why?

 

[Zafer]

Can you explain why?

Türkiye is developing its energy sector that is looking for energy surplus in 5 years or so. Energy imports is the single big ticket item that drains foreign currency reserves. When you patch that hole that leaks money you are already foreign currency positive. Türkiye is also a diverse economy that has production and trade in practically every field you look at. This makes us resilient in the face of changing winds in the world trade and gives us the upper hand in our dealings. It is a basket portfolio of investments that makes gains in other fields when you suffer losses in some. Türkiye has also been through the worst of economic turmoils and has learned to weather it gaining lots of experience. Currently we are the #10 in gold reserves with 642 tons in the bank and are also cashed up with foreign currency.

 

[Deliorman]

Can you explain why?

He will tell you what his wishful thinking tells him but I will tell you the truth.

No matter what happens Turkish Lira will continue to go down and down and down because the Turkish currency and economy lack the most important thing- the TRUST of the local and foreign investors. Everyone with half a brain in Turkey knows that the best thing you can do with your liras is to buy dollars, euros and gold- how can you expect the lira to stay stable in such case?

Turkey is not seen as a country with bright future and it’s government (judiciary and executive branch) are not considered as trustworthy for the big foreign investors too. Turkey is a perfect place for speculative investments, money laundering and scammers but not for the big companies and investment funds who look for stability and potential.

 

[Zafer]

@Huelague

Germany is rumored to be going to repatriate its gold that is kept it the US; what do you think about it, can they actually do it?

 

[uçuyorum]

@Huelague

Germany is rumored to be going to repatriate its gold that is kept it the US; what do you think about it, can they actually do it?

It would be seen as an escalation, they can't without risking sanctions and losing at least half the value of what that gold is, or perhaps more

 

[Zafer]

It would be seen as an escalation, they can't without risking sanctions and losing at least half the value of what that gold is, or perhaps more

Not only that, foreign direct investment in the US by EU is declining fast too, they will pull off.

 

[Huelague]

@Huelague

Germany is rumored to be going to repatriate its gold that is kept it the US; what do you think about it, can they actually do it?

This is a fatal signal to other countries, like, save your moneys from USA. Of course, Germany can do this. But the past/current „agreement“ with US is, store your trade surplus in our Gold Bank.

 

[Nilgiri]

GDP PPP is very irrelevant. Not only that GDP is not a very good indicator, but making further adjustments to it (like the PPP) makes it completely useless.

At least nominal GDP has the same measurement unit, even though GDP is not very relevant in itself, and can be inflated by completely irrelevant economic activity.

There are pros and cons to both estimates.

One problem with PPP, is that its reliant on a very low frequency survey (once every 5 years, once every 10 years on some stuff too) for the prices of consumption goods....through what is known as the ICP (International comparison program). This takes me back to debates I had 10+ years ago when I looked into all of this deeply.

In any case that means countries that experience high inflation in these blocks of time between the survey years (and their releases that are another multi year delay after it too i.e why I say 10 years along with the 5 year one).... basically get an outdated PPP multiplier as result....so their PPP amounts can get highly fudged.

You need to have consistent low enough inflation (like say well under 10%, preferably <5%) for the PPP multiplier components to stay more relevant along "the drift" years.

 

[Huelague]

He will tell you what his wishful thinking tells him but I will tell you the truth.

No matter what happens Turkish Lira will continue to go down and down and down because the Turkish currency and economy lack the most important thing- the TRUST of the local and foreign investors. Everyone with half a brain in Turkey knows that the best thing you can do with your liras is to buy dollars, euros and gold- how can you expect the lira to stay stable in such case?

Turkey is not seen as a country with bright future and it’s government (judiciary and executive branch) are not considered as trustworthy for the big foreign investors too. Turkey is a perfect place for speculative investments, money laundering and scammers but not for the big companies and investment funds who look for stability and potential.

Some points are right. The “stability argument” is mostly wrong. We have the most stability period in our country since 25 years.

 

[contricusc]

There are pros and cons to both estimates.

One problem with PPP, is that its reliant on a very low frequency survey (once every 5 years, once every 10 years on some stuff too) for the prices of consumption goods....

That’s one problem with PPP. The other problem is that when you build foreign reserves, pay down your debt, or when you conduct trade with other countries, you don’t do it in PPP dollars. You do it in nominal dollars.

If a country wants to import oil, copper, fighter jets, ammunition, etc., it pays the same price regardless of its PPP indicator. The US pays the same as Bangladesh or China when importing oil or copper.

When someone says China has a bigger economy than the US, because of the PPP adjustments, it is misleading, because the PPP adjustments doesn’t translate into purchasing power on international markets.

If you have two countries with equal GDP in PPP terms, but one has double GDP in nominal terms because local prices are twice as high, their economies are not equal. The country with higher nominal GDP has much more purchasing power for imports of raw materials, technology, weapons, etc., or to make investments.

 

[Yasar_TR]

Some points are right. The “stability argument” is mostly wrong. We have the most stability period in our country since 25 years.

I am sorry; But just because a country has been ruled by the same political party for 25 years, it doesn’t mean that the same country is economically stable.
Turkiye has seen at least three basic terms of serious economical crises since 2002:

Key economic challenges and periods of instability:

• 2008–2009: The economy suffered a significant recession due to the global financial crisis, with GDP contracting by 4.6%.
• 2018–Present: A major crisis, often referred to as the "Great Turkish Depression", marked by a collapse in the lira's value, high debt, and rampant inflation (reaching over 85% in 2022).
• 2021–2023: An intensified phase of the ongoing crisis saw the lira drop from 8.5 to 26 to the dollar and, as of late 2021/2022, inflation soaring to record levels.

Since than Dollar kept going up. Today it is 1US dollar = 43.60 TR liras.


You can’t call that a stable economy.

Just remember Pastor Brunson incident. Turkish economy went into a spiral dive overnight, because Trump threatened Turkey with sanctions.

In 2002 the exchange rate of GBP fluctuated between 1.95TL and 2.15TL

Today it is 60.09TL

My best friend retired in 2002 and his monthly pension was 450gbp.
Today he gets 410gbp. One Pound In 2002 is worth 2.11pound today. So really my friend’s pension should be 959gbp if no life standard improving salary increases were applied.

 

[Zafer]

Only 14% of state budget goes to interest on debt expenditure, government debt is at 26,7% of GDP, where is the high debt? It is the great war of independence being won in slow motion. Another 5 years and with the energy sector revolution completed goodbye to every weakness Turkish economy suffered from in ages. Energy sector positive Türkiye is a nation most resilient and powerful. Look at the collapsing world and you see Türkiye rising.

 

[Zafer]

Donald Trump is not worried that the dollar is losing value, China wants to devaluate despite the west not wanting them to. Devaluation is good for an exporting economy. So, devaluate at a steady rate.

 

[uçuyorum]

Some points are right. The “stability argument” is mostly wrong. We have the most stability period in our country since 25 years.

Yes the most stable destruction. There are so many gangs and mafias now we have flatbread mafia in mersin. Motorcycle gangs everywhere doing stunts right in front of traffic police on the busiest roads and streets of the city with no penalty.

 

[boredaf]

Only 14% of state budget goes to interest on debt expenditure, government debt is at 26,7% of GDP, where is the high debt? It is the great war of independence being won in slow motion. Another 5 years and with the energy sector revolution completed goodbye to every weakness Turkish economy suffered from in ages. Energy sector positive Türkiye is a nation most resilient and powerful. Look at the collapsing world and you see Türkiye rising.

Fucking hell... you truly do not live in the real world. People can barely afford the live and yet you're spewing shite about country rising. Turkish lira is at its lowest, everything is getting more expensive day by day, but it is all good, it is the world that is collapsing. I'd bet my life that if the shoe was on the other foot and your messiah wasn't in charge of the government you'd be frothing at the mouth about the state of the economy right now.

 

[TR_123456]

we have flatbread mafia in mersin.

Whats that?

 

[YeşilVatan]

Whats that?

As resident Mersinian, I'd like to chime in on this.

As you know, Mersin is famous for its tantuni, but liver or various kebab types are also very popular. All of those require lavaş, or flatbread to consume. To prefer anything other than flatbread means you are not actually fit to consume Mersin's food. This naturally means the city (population 1 million, roughly) is home to thousands of restaurants that require literal tons of flatbread daily.

It turns out there existed a mafia that was aiming to monopolize faltbread production. I didn't look into it but they are going to turn out to be kurdish. Police did a large scale operation targeting the bread gang.

https://twitter.com/i/web/status/2015728220021129237

10.7 billion liras. Imagine the scale of the operation.

 

[Nilgiri]

If you have two countries with equal GDP in PPP terms, but one has double GDP in nominal terms because local prices are twice as high, their economies are not equal. The country with higher nominal GDP has much more purchasing power for imports of raw materials, technology, weapons, etc., or to make investments.

It depends. There are a lot of issues with nominal GDP (converted to USD directly) as well.

It assumes USD based trade/capital flows are

a) something like 20% of total GDP to achieve something close to pareto quantitatively
b) the impact even if a) is met is pareto qualitatively on the remaining 80%

Most times a) isnt met to begin with and b) is of varying correlation to extrapolate 1:1 to from that 20% (i.e final consumption and final investment rarely sufficiently mirrors what is traded/intersected with others)

That was the whole reason why the concept of PPP started since large countries at the time (1980s) such as PRC were barely having any trade intersection with the world to begin with, yet obviously were consuming energy and other base inputs far more than the resulting nominal conversion suggested.

There is nothing intrinsically wrong with China having a higher PPP GDP than the US today. It has advanced considerably post-Mao and has a population 4 - 5 times higher than the US. It is simply matter of time it consumes more than the US does. Same goes for India whenever that happens....again the population is much higher than the US.

It is not PPP's fault either that the GDP nominal is inflated with various countries. All PPP does is more accurately reflect the 80% bulk of economy that is not following the pareto correlation transmission by looking at actual prices and consumption scales there. Part of reason CCP has also not allowed same sampling rate (number of cities allowed in survey etc) like other peer countries do if you look at the relevant papers involved.

i.e that is separate matter with say PRC and it being brought up like it did with Wen Jiabao and Li Keiqiang, the reforms they suggested (at local CCP level where there was bad incentive structure in reporting and tabulation and errors compounded over time to make it "unreliable") and so on..... till both them and their factions were suppressed by the current guy. Those that also use (or are convinced by) the nominal figure in "beijing CCP asserts so" weathervane kind of way with no proper caveats added. given all this....again thats on them.

 

[contricusc]

It depends. There are a lot of issues with nominal GDP (converted to USD directly) as well.

I agree with you that nominal GDP is also a very flawed indicator.

I thnk that the PPP variant is more relevant when comparing the purchasing power of the population, while nominal value is more relevant when comparing the size of a countr’s economy,

What matters most for a person is the quantity of goods and services he/she can purchase (which outside vacations is almost completely spent locally), so the PPP adjustment makes sense.

But when comparing countries, what matters is their ability to trade, to project power and to intercat with other countries. This is mostly done in nominal terms.

You can’t buy F35 jets or Blackwell NVIDIA chips with PPP adjusted dollars.

When you compare company profits, you don’t use PPP. You simply convert their earnings at the market rate. A multinational company earning billions of dollars in the US is much wealthier than a company earning millions of dollars in India, because it has more money for M&A or for expansion abroad. The PPP becomes meaningless in this situation.

 

[begturan]

As resident Mersinian, I'd like to chime in on this.

As you know, Mersin is famous for its tantuni, but liver or various kebab types are also very popular. All of those require lavaş, or flatbread to consume. To prefer anything other than flatbread means you are not actually fit to consume Mersin's food. This naturally means the city (population 1 million, roughly) is home to thousands of restaurants that require literal tons of flatbread daily.

It turns out there existed a mafia that was aiming to monopolize faltbread production. I didn't look into it but they are going to turn out to be kurdish. Police did a large scale operation targeting the bread gang.

https://twitter.com/i/web/status/2015728220021129237

10.7 billion liras. Imagine the scale of the operation.

What kind of flatbread is this? Almost a $250 million market, and that much money circulating in a single city, isn't that abnormal? So, it's not about the flatbread!