Schlagwort-Archiv: Economy

Could Erdogan survive Turkey’s economy

Turkey‘s growth is with 7.4% very high but it has also a high inflation. Housingprices and PMI are slowing. The growth in the second qurater of 2018 is retrogressive. The forecast for the second half of 2018 is between 2% and 3%. The trade balance is negative. But this is normal as it is since the 1970s. The imports rise much faster than the exports. After inflation rises high the turkish centralbank has pushed the rate up to 17,75%. The politics intervene and forced the Centralbank to let the rate down. This pushed the economy to growth and Turkey has created 1,5 new jobs yty. And Turkey is expierienced with high inflation. In 1997 Inflation was 85,7%, it decreased to 7% in 2002 staying stagnant until 2016. With the new rate inflation will decrease.

The tourism slowed after the coup in 2016 but is recovering now.

Consumer Price Index CPI in Turkey averaged 191.22 Index Points from 2003 until 2018, reaching an all time high of 348.34 Index Points in May of 2018.

CPI Transportation in Turkey averaged 186.89 Index Points from 2003 until 2018, reaching an all time high of 354.31 Index Points in May.

Producer Prices in Turkey averaged 85.23 Index Points from 1982 until 2018, reaching an all time high of 354.85 Index Points in May of 2018.

The industrial production is in a normal ratio.

The Global Competitiveness Report published by the World Economic Forum say that Turkey averaged 4.31 Points from 2007 until 2018, reaching an all time high of 4.46 Points in 2015.

If the economy of Turkey begins to slow it could be a real threat to Turkey‘s political stability. But the industrial production and the GDP increases steadily since 2010 discontinous only in March of 2016. A short regression will be normal after this period of growth. The unemployment rate is 10%. This is not very high but it is  slowly increasing since 2012. In a recession unemployment could rise and people could become inconvenient. If foreign investors become tentative this could have the reason because of the possible recessive scenario. Politically Erdogan will find his support. The presidial system will make his agreements stable against parlament decisions. Agreements with the präsident will be more reliable. And this will be in the interest of investors. Also this system is related to the system of the USA. In USA it is established and proven.

 

Dollar increasing. Indizes stagnant. How is developing gold?

China and India gold purchases are stabilising the gold and silver price, even though the US dollar strenghtened. Gold usually is traded in US $. So, normally, if the US $ strengthened the gold and silver prices decrease. The last years the primary gold production yearly is stable by 3000 t. China and India together purchase 2000 t of that primary gold production. The rest, 1000 t, including the recycled gold is splitted by the rest of the world. If India and China stop that gold price could sharply decrease.

The gold stocks of the EU-States and on commodity exchanges are falling. Also the ETF’s are selling gold. This shows the activity of the swiss gold refineries. ETF’s have 12,5kg gold bars. China and India are buying 1kg bars, China with 9999 and India with 9995 quality of purity. Since 2013 the swiss gold refineries producing 1 kg bars of the 12,5 kg bars, which are normally used by the ETF’s. The swiss export statistics show that these 1 kg gold bars are exported with increasing value to China and slowly decrescent to Hongkong. Chinese officials said in the past, that China wants to secure its currency with real values like gold. China also accumulates the gold which it produces itself. China is the biggest primary gold producer. Chinas reserve is probably much bigger than the 1000t it has pronounced years ago.

If the FED will start to increase the rate the gold and silver price will increase quickly. The FED announced several times that it will increase the rates, if the job market is good and the economy start to grow sustainable.

The Indians and the Chinese, the world’s largest buyers of gold, have seen the value of their gold investments increase by approximately 200% over the last decade measured the worth in their domestic currencies.. Due to a collapse in their national currencies, South East Asians and Koreans have also seen the value of owning gold.

So the reserves of gold and silver which China and India buy now will be increasing it’s worth or will help to keep the yuan stable if the currency slumps.

And the finance system in China challenges the government. The local governments, the real estate sector and the industrie are highly indebted while the economy slows and the real estate sector slumps. The Chinese governments think about quantitative easing to give the banking system and the local governments enough liquidity to pay their debts and to have liquidity for operating and innovative businesses. China also plans to liberate its financing system to make it more flexible.

And China is not the only country, which is highly indebted. South Korea, Thailand, Malaysia and Hungary are also countries where the debts are critical high.