Dear chancellor Angela Merkel, what an amazing bedfellow you have in Turkish president Recep Tayyip Erdogan.

After ridding the court and parliament of anyone who disagrees with him, and after shutting down any newspapers and businesses that speak out against him, Erdogan extended Turkey’s state of emergency for 90 days today.

Previously Erdogan stated a 12-month extension of the emergency powers might “not be long enough for Turkey”.


Indefinite Suspension

Please consider Erdogan hints at extending Turkey’s state of emergency.

“I believe the nation will support an extension of the emergency rule,” Mr Erdogan said in Ankara on Thursday. He added that even a 12-month extension might “not be long enough for Turkey”.

His comments suggested he was preparing to reverse promises made to investors and the Turkish public. Mr Erdogan had said the 90-day state of emergency implemented after a failed coup in July was a temporary measure designed to flush out coup plotters.

The lira, which plummeted at the beginning of the week after Moody’s downgraded the country’s credit rating to junk status, fell further to 3.007 to the dollar on Thursday, highlighting investors’ concerns that the economy was being held increasingly hostage to politics.

The emergency powers, due to expire around mid-October, allow Mr Erdogan to rule by decree and make decisions that cannot be overturned by the Constitutional Court, the country’s highest legal body.

Mr Erdogan has already targeted the court, removing two of its members, in a sweeping crackdown on officials suspected of allegiance to Fethullah Gulen, a self-exiled cleric he blames for the failed putsch.

Since placing the country under emergency rule, the government has jailed tens of thousands of people, and accused more than 100,000 citizens — from doctors and teachers to journalists and military commanders — of colluding with Mr Gulen.

The government has also seized dozens of businesses, accusing their owners of funding Mr Gulen’s activities.

Fitch Mongering

Moody’s and the S&P have both downgraded Turkish debt to junk status. Fitch maintains an investment grade rating for Turkey.

Congratulations! Fitch will get all of the Turkish rating business for as long as it can stomach this farce.

Spotlight on Turkish Lira


Lira Trends vs US Dollar

  • Devaluation Since Dec 1991: 99.67%
  • Devaluation Since Mar 2000: 80.12%
  • Devaluation Since Sep 2007: 60.24%
  • Devaluation Since Dec 2014: 20.49%
  • Incremental Loss 2000-2007: 50%
  • Incremental Loss 2007-2014: 50%
  • Incremental Loss 2014-2016: 20%

I believe it’s safe to spot the trend here. Get out of Turkish Lira.

Dear Angela, how can you look at yourself in a mirror every day and like the person you see?

Mike “Mish” Shedlock