Long-story short: Turkey had two choices:
A) Release the American Pastor they've been holding in prison since the Obama years as leverage after being refused the Extradition of a guy named Gullen from Pennsylvania, OR;
B) Destroy their entire economy.
Turkey chose "B."
Earlier Sunday in Foreign Exchange (FOREX) Trading, the Turkish national currency known as the "Lira" continued the slide it has been experiencing and has now fallen to 7.20 against the US Dollar.
This means that as of Sunday at 6:00 PM eastern US time, the Lira has lost enough value against the US Dollar to make a collapse of their Banking System UNAVOIDABLE.
TURKISH BANKS ARE NOW, OFFICIALLY, INSOLVENT.
Mathematically, there are no longer enough Lira in existence for the Turks to repay their foreign loans - which are contractually structured to require repayment in US Dollars.
Turkey has been playing nasty games with the United States for years, because they knew President Barack Obama was a mental weakling. They got away with it because Obama was not tough enough to do anything to give the Turks pause.
Enter Donald Trump.
To give you clear understanding of what has gone on, look at the Value of the Lira since Trump took office and told Erdogan to release the American:
Two years ago: 2.95
One year ago: 3.54
Six months ago: 3.81
Three months ago: 4.28
So loans taken by Turkey and its companies, which previously cost them 2.95 to pay off, now cost 7.20 to pay off. There isn't enough money in their entire country to service the debt anymore.
This is being done deliberately by the United States as punishment for continuing to hold an American Christian Pastor as a sort of hostage (under the guise of criminal law) until Turkey gets the US to send Gullen from Pennsylvania, where Gullen has lived peacefully and lawfully since 1999.
Edogan thinks of himself as some kind of new Ottoman King, turning Turkey from a secular democracy into an Islamic Theocracy.
He did so by staging a completely phony "coup" which he then used to PURGE intellectuals, political rivals, TV, Newspapers and Magazines, schools, colleges, police, and the military of ALL people opposed to him.
Gullen in Pennsylvania is one of the people that Turkey accuses of being part of the alleged "coup." They want Gullen extradited but we aren't sending him because there's no actual EVIDENCE the man had anything at all to do with political troubles inside Turkey for which the Turks want to arrest him.
When the Turks were told by the Obama Justice Department the US would not be sending Gullen because there is no actual evidence he did wrong, the Turks grabbed up an American Pastor and jailed him. Obama didn't do anything about that.
Since the alleged coup, Erdogan has shrouded his politics in the symbolism of Islam. His government was even caught publicly allowing terrorists from ISIS to smuggle convoys of stolen oil from Syria into Turkey, where it was slightly refined, re-packaged, and sold . . . giving the Islamic terrorist group about 100 Million a month in revenue to help them grow.
Despite Turkey being a member of NATO (HT Comment: which should never have been allowed) Turkey makes repeated air incursions into the air space of fellow NATO member Greece, and uses the Turk Navy to harass Greek shipping because Turkey wants to claim Islands off its coast as Turkish Territory. It is long settled those islands belong to Greece. Erdogan doesn't care.
It was during the Obama years that Erdogan personally ordered the SHOOT-DOWN of a Russian military jet in Syria, which Turkey falsely claimed had entered Turkish air space. That decision literally put into motion the possibility that Russia would attack Turkey, thus triggering the NATO treaty and causing a major war.
During a visit to Washington DC, Erdogan encountered hundreds of Turks opposed to him. They openly protested outside the Turkish Embassy, which is their RIGHT here in America. When Erdogan got our of his car in the driveway at the Embassy and saw the criticism, he ORDERED his security force to go physically attack the protesters! HERE, in AMERICA!
The security people attacked . . . and were arrested by US Police.
Erdogan has finally encountered a US President who won't tolerate his nonsense. Donald Trump told Erdogan to either release the American Pastor or face economic sanctions. Erdogan refused. Sanctions were applied. They caused a sudden drop in the value of the Lira.
Erdogan publicly belittled President Trump and vowed to never give-in to US demands.
The drop in the value of the Lira continued.
Last week, Erdogan told his people "They have Dollars, we have Allah."
Trump DOUBLED the level of Tariffs on Steel and Aluminum from Turkey (because their currency devaluation make those products cheap and anti-competitive to US manufacturers) and THAT is when the rest of the world finally figured out that Trump is going to destroy Turkey.
The doubling of Tariffs caused foreign investors to begin pulling-out of Turkey. That caused the currency to drop faster.
Turkey then told the US "it isn't worth doing this over a single American Pastor." Wrong thing to say.
Word went out late Friday night "the plug is being pulled on Turkey."
That sent investors into a panic to get out while they still could.
This afternoon (Sunday) the head of the Turkish Central Bank implemented Capital Controls; No more SWAPS of Turkish Lira for the US Dollar, The EURO, or the British Pound.
Game. Set. Match.
Capital Controls are the death knell for a country. In a desperate bid to prop-up their foundering currency, a country implements Capital Controls to prevent the flight of Capital . . . which just makes everyone want to get out faster!
Blocked now from trading their cash for US Dollars etc., Turks are fleeing their currency by using Digital Currency. DigiByte seems to be the preferred choice and as of Sunday, a full forty percent of ALL Digitbyte trades in the world, are coming from a single brokerage in Turkey!
The Turks are desperately fleeing their own currency. Their country is now in actual, full-scale economic collapse. LIVE. RIGHT NOW.
Turkey had two choices; they chose poorly.
When Turkish Banks open Monday (if they open) there will be bank runs.
In addition, Turks will now DEFAULT on Government Bonds and Corporate Debt because there aren't enough Lira in existence to pay off the loans now that the value of the Lira has fallen lower than 7.
Hopefully, the Turkish people will realize quickly, they need to get rid of Erdogan and his government.
We'll see if the Turks wise-up.
6:20 PM EDT -- In apparent sign of beginning capital controls, Turkey's second largest bank Garanti has informed clients of FX suspension in USD, EUR and GBP. Only open positions can be closed.
6:30 PM EDT -- Turkish Banking Regulation and Supervision Agency imposed a limit on the amount of foreign currency and lira swap and swap-like transactions, which are not to exceed 50% of the bank's shareholder equity.
(HT NOTE: Keep in mind folks...this is Asia trading here... It's 1:30 AM in Ankara right now. Europe hasn't even woken up to this yet. Its over for Turkey. Their country will be in financial ruin by the end of business today.)
7:00 PM EDT -- Unbelievable...US Dollar in Turkey: 7.62
8:25 PM EDT -- Turkish Government-Controlled Newspaper issues Veiled Threat of "another 9/11" in the U.S.
An Islamist columnist at a pro-government Turkish newspaper has raised the threat of a second terrorist attack on the United States like that of September 11, 2001 should the United States not capitulate and reduce tensions with his country.
“Trump too, who is attacking right and left like the proverbial elephant in a china shop, will one day learn that creating more tensions in relations with Turkey will lead to more problems for the U.S. and EU countries,” Abdurrahman Dilipak wrote in Yeni Akit.
“Or else some people will teach him that. It must be seen that if internal tensions with the United States continue like this that a September 11 is no unlikely possibility.”
Turkey, like Iran and Venezuela, was under attack from the United States, but Turkey would resist, Dilipak said.
U.S. collaborators within Turkey will be punished alongside their master if they dared go out on the streets to protest, he added.
Text (Via Google Translate)
lots more: http://halturnerradioshow.com/index.php/news/world-news/2981-turkey-suffering-live-economic-collapse-right-now-lira-falls-to-7-20-capital-controls-begin