We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Turkey – circling the drain with a gold grab

Little noticed in the UK media, reports from a financial vlogger Joe Blogs (that is his handle) on Turkey tells us that the government is ‘asking’ citizens to hand over their gold and foreign currency, at a time of 50% inflation, but citizens will get Lira in return.  There are 30,000 gold shops in Turkey and five major refineries. Do not worry that Erdogan is a (not so) covert Islamist, he is first and foremost a Keynesian.

The Turkish government is not simply standing by and watching as the Lira inflates away, the government has cut tax on food from 8% to 1%, and this in the context of a currency crisis, the lira falling 44% in 2021 against foreign currencies. So they know that cutting taxes eases burdens on people. Unfortunately, Atatürk’s doctrine of ‘statism‘ lingers, with lots of Turks employed by the State.

Meanwhile, the Turkish Finance Minister has been in the UK and reported had a ‘fantastic‘ meeting with potential investors. And the goverment is determined to keep on down this path, telling the private banks to step up their efforts to help by handing over foreign currency deposits. (Doubtless this is all voluntary).

Here is a graph of recent Turkish inflation rates. Are we going to be seeing a ‘crack-up boom’ in real time any week now? Turkey is reportedly informally dollarising, with over 50% of transactions in Turkey in dollars (Why not the Euro?).

I can’t help thinking that in the UK, the government is looking at Turkey with envious eyes, dreaming of taking steps to inflate away what remains of our prosperity and to seize our assets.

And it is not all bad from the Turkish government, they have changed the name of the country in a re-branding exercise, changing it from ‘Turkey’ to ‘Türkiye’, apparently to avoid confusion with the bird of the same name.

Joe Blogs also has some interesting coverage on the Chinese property conglomerate Evergrande, and the efforts of a US Hedge Fund to take ownership of collateral in Hong Kong.

13 comments to Turkey – circling the drain with a gold grab

  • Nicholas (Unlicensed Joker) Gray

    Speaking of names, how about we change Beijing to Peking? It was the Communists who wanted it to be pronounced as Beijing, but they don’t bother to pronounce Australia correctly- they call it Au-da-li-ya. Brits call Munchen ‘Munich’. and nobody worries. And a menu item is still called Peking Duck, not Beijing Duck! So how about a linguistic revolt at Communism, by calling it what we want?

  • James Hargrave

    I reviewed an academic book on the Silk Road etc. some 5-10 years ago. Its author, I believe deliberately (since one of his interests is Tibet), used Wade-Giles not Pinyin as a subtle two-fingers to the brothers in ‘Beijing’. I slip Wade-Giles in whenever I can

  • John B

    The French still use Pékin. They also call the Thames, La Tamise and England Angleterre.

  • NickM

    Well, the re-spelling of Turkey’s name is basically just putting it into Turkish. I holidayed in Western Turkey a few years back and it was cool. Istanbul in particular was a fine city. Loads to see and do. I have a photo somewhwere of me (a bit pissed) hugging the statue of the bull just before crossing into Asia for my first and only time. People would knock off from work, Friday prayers and then have a beer. It was great. I just think Erdogan has fucked the place over on so many levels. I also visited Troy and Gallipoli.

  • James Hargrave


    I find that I have to prevent myself calling it Constantinople. Byzantium is so much better.

  • Mr Ed

    Show me an Englishman who calls Lisbon ‘Lisboa‘.

    Ditto the Azores ‘os Açores’? (lit. ‘the Hawks’).

    Madeira ‘Wood’?

    And it is ‘The Ukraine’ in English (c.f. ‘Argentine’ ‘Netherlands’ ‘United States’).

    I went to Turkey before the end of the Cold War, by train from Germany through Austria, Yugoslavia and Greece. I delighted in asking the Greeks if the train I boarded was for – Latinised in my speech 😉 – Konstantinopolis, and I was told that it was.

    Thank you James, I am a ‘Peking’ man, I won’t duck the issue, the same if you put ‘Bombay’ into the mix. No one is going to Wien me off the correct name for Austria’s capital.

    But I would struggle to find a good reason to call Georgia’s capital ‘Tiflis‘.

  • Patrick Crozier

    Keynsian? I thought it was Keynes who described gold as a “barbarous relic”.

  • Mr Ed


    Keynsian? I thought it was Keynes who described gold as a “barbarous relic”.

    Indeed he did, but for thee, and not for he.

  • Paul Marks

    Correct Mr Ed – the ruler of Turkey is not getting his Keynesianism (his endless money printing and Credit Bubble banking) from Muhammed – this insanity is no where to be found in the Koran or any of the Hadiths.

    Patrick Crozier – yes Keynes did smear gold, that is the point. As for his “economics” – he knew perfectly well that the cause of the mass unemployment was government regulations (such as the 1875 and 1906 Trade Union Acts – no they did not “legalise trade unions”, they already were legal [they had been illegal for a few years in the Napoleonic Wars, but legalised again in 1824], what these Acts did was give them POWER to distort the labour market). But Keynes did not suggest repealing these regulations – oh dear me no, the state must never be rolled back – it must only advance (“history has no reverse gear” as a so called “Conservative” once said to me). Instead there must be fiat money creation and Credit Bubble ism.

    Despots want to control the money – that is part of despotism. Having a commodity as money is NOT what they want – hence the gold “standard” and other scams (oh yes – even the gold “standard” was a scam, just a moderate one by the utterly insane standards of today).

    As for the “liberal” Keynes – well one can read works that pull his economics, and his ethnics, apart – such as “Where Keynes Went Wrong” by Hunter Lewis (which Perry gave me – possibly because he was tired of me citing books that were so old, which I had read in my childhood).

    Or one can just read the preface to the German Edition of the “General Theory”.

    Keynes wrote that preface – and when he wrote it the nature of the National Socialist regime was obvious.

    The idea that Keynes was a “liberal” is bunk. He called himself a liberal – but so did the totalitarian collectivist Bertrand Russell (Russell was even worse than Keynes).

    By the way there is an in-joke in the “General Theory” that lot of people miss today.

    Professor Pigou (yet another Cambridge man – like Keynes and Russell) is described as an orthodox free market economist. In reality Pigou was statist lunatic – who, for example, believed that people should be punished if they suggested that government spending should be below the “correct” level. He ended up advising the Atlee Government (no surprise).

    It would be like me saying “I am bald – but that chap Yul Brynner has a fine head of hair”.

    It is a joke – but if someone did not know who Yul Brynner was they might think that he actually did have a fine head of hair.

  • Going back to the original point, the Turks wouldn’t exactly be the first to do a gold grab. The US did it under Roosevelt in 1933 (Executive Order 6102) and the UK’s Labour Government pulled a similar stunt in 1966.

    Two decades after the war ended, and 35 years after Britain quit the Gold Standard, its politicians were busy meddling with gold investment. Because the Pound was falling on the currency markets. So people were buying gold, sending money overseas to buy it and so hurting the UK’s already terrible balance of trade. Thereby hurting the Pound yet again.

    To try and stem the slide, the Labour government put a block on imports of gold coin, and banned private citizens from owning more than four gold coins. Anyone with a bigger collection had to tell the Bank of England, whose officers would then judge whether the owner was a true collector, or a speculator.

    Speaking in the (very heated) parliamentary debate of 13 June, the Conservative MP for Worthing, Terence Higgins, asked why the Government was attacking gold. “People are holding gold because they have no faith in the Government’s policy on the stabilization of the cost of living and on curtailing the rate of inflation…Will it take action against other specific assets which are a hedge against inflation?” (Indian households might ask the same today.)

    But too bad – the “rule of four” went through (as it became known by retail dealers). By June 1967 some 4,847 people had submitted themselves to the Bank of England’s scrutiny, and prosecutions had begun. Exchange controls on gold were finally lifted by the first Thatcher administration’s first budget, in 1979.

  • Paul Marks

    Thank you John Galt – I was ignorant of some of this.

    Yes – the evil always target gold and silver, either by debasing the coinage, or by trying to do away with gold and silver coinage all together.

    I repeat the gold “standard” was a itself a SCAM (a “legal” fraud) – because the Central Bank and the Commercial Banks always lent out more money than they actually had physical gold (Mr J.P. Morgan used to have one Dollar of physical gold for every three Dollars of loans “broad money” – and he was actually much LESS bad than many others).

    But the gold “standard” looks like a very moderate scam (fraud) – compared to the utter insanity of modern times.

    There is nothing wrong with being a money lender – as long as you are lending out real money (not Credit Bubble blowing) and you understand that once you have lent out the money (the gold – or silver, or whatever the money is) you DO NOT HAVE THAT MONEY ANY MORE (no book keeping tricks – such as “crediting to the account”) till when, and IF, you are repaid.

    I remember the late L. Neil Smith saying that a speck of gold could be put in a transparent plastic coin. But there is nothing wrong with the electronic transfer of ownership of gold (or silver – or whatever) – no need to carry around large number of coins.

    AS LONG AS the only thing the electronic system is being used for is to transfer the ownership of the physical commodity (i.e. not Credit Bubble blowing).

  • “And it is not all bad from the Turkish government, they have changed the name of the country in a re-branding exercise, changing it from ‘Turkey’ to ‘Türkiye’, apparently to avoid confusion with the bird of the same name.”

    The horror, those Turks calling their country by its actual name! Next you’ll be telling me that those Germans have changed their country’s name to something bizarre, like Deutschland.

  • Paul Marks

    Why not call it Anatolia.

    One question is how many modern Turkish people are really Turks (i.e. invaders from Central Asia who took over most of the land after the Byzantine defeats of 1071 and 1176) – and how many people there are from the pre Islamic population who changed their culture (and language) over time – to fit in with the new rulers.

    I do not know the answer to this.