Turkey going down the tubes

Spengler writes: Recall notice for the Turkish model
As a matter of record, I wish to state that I am shorting Turkey not for any political motivation, but only because the Turkish government economic policy is a clown show.
Erdogan has the weirdest economic views of any serving head of government. He justified the credit bubble on religious grounds, pledging repeatedly to cut the "real" interest rate (the cost of interest minus the inflation rate) to zero.
"We aim to cut the real interest rate in the long run, so people will increase their incomes through working, not through interest," he said last April. "Eventually we aim to equalize the interest rate and inflation rate."
Erdoğan believes that this would fulfill the Islamic injunction against lending for interest; if the real interest rate is zero, he seems to think, the sharia ban on interest is fulfilled de facto. In order words, Turkey provided nearly free money to bank customers. Erdogan's program set in motion a series of perverse effects. One is a sharp fall in the exchange rate.
iShares MSCI Turkey Investable ETF (TUR) was down 37% in 2011, with currency depreciation and declining stock prices both contributing to the losses.

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