Erdogan président Turquie

The joke ! “We don’t have a problem with inflation. But a problem with the cost of living”… – Insolentiae

Here is the quote of the day.

“We don’t have an inflation problem. But a problem of high cost of living”!

So let’s play the guessing game, who do you think we owe this pearl to?

The suitors are not lacking!

Janet Yellen, who saw nothing coming to the United States, could claim authorship of this sentence. I guess in order to be politically correct and inclusive one would have to change the phrase ‘the fatherhood of something’ when talking about Janet Yellen’s motherhood…although in talking about her motherhood I think I’m referring to her condition of procreative female undergoing the dictatorship of ancestral patriarchy.

So, if anyone among you has a diploma in wokism, I’m a taker…

In short, we could also nominate our great guru to the national economy Mr. Bruno the Mayor, or even our lady Christine Lagarde from the ECB who has been giving us nice treats for years.

Well no, it’s not Lagarde, moreover, she’s been in pretty bad shape in recent months, she’s even starting to tell the truth, that is to say her advanced state of weakness.

No, the star of the day is Turkish President Erdogan.

Erdogan persists and signs: to fight against inflation… he will continue to lower rates

And there it is a high-flying intellectual and technical festival. I am not sure that our Turkish friends, who leave feathers there daily, find the joke of inflation very funny, because it is always the population which is affected by inflationary phenomena. The rich, them, in Turkey as at home always come out of it. For the most modest and the middle classes it’s a different story!

“We don’t have an inflation problem. But a problem of high cost of living, said the Turkish head of state. “We don’t have an inflation problem. But a problem of high cost of living, ”said the Turkish head of state. To fight against inflation, the remedy is known: we must increase interest rates to curb consumption and lower prices. With the risk, in the event of too violent a rise in rates, of stifling growth and impacting employment. This scheme as old as Herod, Turkish President Recep Tayyip Erdogan does not follow. While inflation in Turkey reached 73.5% year on year in May, he announced on Monday that he wanted to lower interest rates again.

“Let no one expect that from us. This government will not raise interest rates. On the contrary, we will continue to lower them, ”said the Turkish head of state during a press conference following a meeting with his cabinet.

Already in 2021, he had forced the central bank to lower its key rate from 19% to 14%, between September and December, causing the national currency to collapse. The Turkish lira lost more than 47.79% of its value over one year. Recently, the Turkish central bank refused to raise its key rate in an attempt to curb inflation and kept it at 14%.

Driven by rising energy and food prices, inflation in Turkey is at its highest since December 1998.

Inflation is at the heart of the debates in Turkey, one year before the presidential election, scheduled for June 2023, the opposition and many economists accusing the National Statistics Office (Tüik) of knowingly and largely underestimating its magnitude.

Independent Turkish economists from the Inflation Research Group (Enag) said on Friday morning that inflation actually reached 160.76% year on year, more than twice the official rate.

“We don’t have an inflation problem. But a problem of high cost of living, ”said the Turkish head of state.

On the other hand, to try to be perfectly objective, Erdogan is perfectly right to think that increasing the rates will create a very strong economic recession, and it is because we create a strong recession that we lower the demand and that this drop in demand lowers the rise in prices and therefore inflation.

But, for the first time in the world, inflation is not only monetary, it is also linked to a violent and unprecedented phenomenon of resource scarcity.

The adjustment is therefore made via the price, and the longer and greater the scarcity, the longer and higher the adjustment via the price will be.

This is not a monetary phenomenon, but a phenomenon of adjustment of supply and demand.

In this case, is raising interest rates the most appropriate solution?

This is, I think, the way to ask the question and open the debate.

Charles SANNAT

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