Turkey made some phenomenally bad decisions, but Europe made some very bad decisions as well. We’re already starting to see the fallout of all that starting to unfold. I expect the full impact will be seen by winter.
Erdogan’s economic policy goes beyond just bad into the realm of phenomenally stupid. This is a guy who was cutting interest rates to fight inflation, the equivalent of fighting a fire with gasoline. Europe will have its struggles, but they’re not horribly mismanaged like Turkey.
The European central bank has forecast that it plans on upping rates soon. Its rates are also effectively much higher than Turkey’s, once you factor inflation in.
They’re higher than Turkey, mostly because Turkey’s interest rate is set significantly below inflation. There’s also the future: Europe will raise its rates, while Erdogan shows every sign of sticking to his “untraditional” path.
Eurozone rate is also below inflation. So far there is no concrete indication that the rates will be going up. Given that raising interest rates hurts asset holders first and foremost, I wouldn’t hold my breath this will happen to any significant extent either in Europe or US.
Just a preview of what to expect in the rest of eurozone in the coming months.
Turkey has struggled with inflation and took really bad decisions about it. So, it is likely that it will still be worse for Turkey in the future
Turkey made some phenomenally bad decisions, but Europe made some very bad decisions as well. We’re already starting to see the fallout of all that starting to unfold. I expect the full impact will be seen by winter.
Erdogan’s economic policy goes beyond just bad into the realm of phenomenally stupid. This is a guy who was cutting interest rates to fight inflation, the equivalent of fighting a fire with gasoline. Europe will have its struggles, but they’re not horribly mismanaged like Turkey.
Go look at what interest rates across eurozone right now, I’m not seeing much difference there.
The European central bank has forecast that it plans on upping rates soon. Its rates are also effectively much higher than Turkey’s, once you factor inflation in.
Buddy, Europe has been running a policy of zero and in some cases even negative interest rates. Not sure where you think these high rates are exactly.
They’re higher than Turkey, mostly because Turkey’s interest rate is set significantly below inflation. There’s also the future: Europe will raise its rates, while Erdogan shows every sign of sticking to his “untraditional” path.
Eurozone rate is also below inflation. So far there is no concrete indication that the rates will be going up. Given that raising interest rates hurts asset holders first and foremost, I wouldn’t hold my breath this will happen to any significant extent either in Europe or US.