Now even the rabbit is surprised by this

KKM took its first steps with MB backselling. The energy needed for the next period was provided with penal conditions imposed on banks. Finally, the bunny was put back in the hat and quickly dressed in the 40% costume and presented to the audience.

Magic is one of the things that affects children the most. Disappearing handkerchiefs, bodies cut in two with a saw and then reunited, pieces of paper that turn into pigeons and even the rabbit that comes out of the hat, which finds its place in idioms, are the visual feast of this magic. But this is only an illusion.

In the economy of our country, the illusion has also been used in previous periods to reach the points of equilibrium imagined by the politicians through the bureaucrats. Magic tricks have been attempted, such as the cancellation of Treasury bond auctions in 1993 to reduce interest rates, and the reduction of inflation with exchange rate targeting in 1999, but the realities and dynamics background economics have shown how expensive this illusion can be. be. He has always made the citizens of the Republic of Turkey pay a heavy price to prove that he imposes the truth that I have said by sticking to political ideology.

After twenty years, the same cycle returned with the fall in interest rates for an ideological reason. Politicians who do not understand and cannot internalize the fact that short-term interests cannot determine long-term interests consider it a custom to use magical methods to achieve this. To achieve this, the methods of removing the rabbit from the hat are explained one after another.

In early September 2021, Central Bank Şahap Kavcıoğlu’s statement that we will determine the policy rate by looking at underlying inflation, not the stock, caused the hat to take its place on the stage, and all segments of the financial world began to worry. After a few nights, the first rabbit came out of the hat.

CURRENTLY PROTECTED DEPOSIT RABBIT

Presented to the public as a great tool to lower the exchange rate, KKM took its first leap with the $7.5 billion in sales disguised by the Central Bank of the Republic of Turkey, after the president’s statement on television .

Chart1

The energy necessary for the rabbit to continue on its way was made possible by a number of penal conditions imposed on the banks through the intermediary of public authority. Accordingly, it is very clear that there is a significant difference between the rabbit sticking out of the hat and the facts, for those who have a high consciousness and have not severed their ties with reality. While the magicians see that the ratio of foreign currency deposits to total deposits decreases with the pound (57.06%), the reality is that dollarization has increased (69.85%) moving from TL deposits to KKM .

The fact that the speech of reducing inflation could not be achieved by linking the speech of reducing inflation to the new economic model, reducing the current account deficit, ensuring the stability of the TL and stabilizing prices thanks to this stability, made it necessary to reuse the hat and the rabbit. When it became clear that even the decision to transfer 25% of foreign exchange from exporters to the Central Bank, implemented in the 1990s, would not be enough in a short time, the rabbit was put back on the hat and dressed 40% dressed up and presented to the public. In addition, a note on the transfer of foreign currency received by tourism professionals to the Central Bank is attached to the costume.

Realizing that monetary policy has been rendered meaningless and inflation knows no bounds, the financial sector, with the leverage it uses, has added high interest rate CPI indexed papers to its portfolio and funded them at the Central Bank, while on the other hand, it has increased the credit growth rate at an unprecedented rate over the past three years.

Chart2

When he signed, it was inevitable that a new bunny would come out of the hat. It was a first in history and a decree was issued regarding the provision for commercial loans in bank assets, ignoring the property rights of Article 35 of the Constitution.

The fire of the exchange does not go out, the accumulation of reserves of the Central Bank of the KKM and the exchange of the exporters (25% of the 60.3 billion of exports of the first three months were used in the calculation) January 2022

Table 1

Source: Haluk Brümcekci

While it should be 31.8 billion US dollars between the year 2022 and 31.8 billion US dollars, this figure has only increased by 7.8 billion US dollars with the sales made by the small gate, the same fate of US$24 billion as the disappearance of US$128 billion showed that new rabbits are needed. According to news from the Bloomberg news site based on some sources, it is understood that the transfer of resources will not be limited to buying from the country’s poor and giving to the rich.

ALICE IN WONDERLAND

“Alice in Wonderland” is not a children’s book as we know it. Author Charles Lutwidge Dodgson, professor of mathematics and also a priest, wrote this book under the pseudonym of Lewis Carroll to criticize England at the time. At the start of the book, Alice falls downstairs and encounters a rabbit. There are two roads in front of him, he asks the rabbit “Which road should I take?”. The rabbit gives a surprising answer: “It doesn’t matter where you go if you don’t know where you are going.”

It seems that the management of the economy has no idea where it is going. He listens to Alice’s bunny’s response and tries every possible way. But the Rabbit’s patience is up to a point.

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