- Oct 3, 2018
- 3,199
Following the events in Russia, India, the United Kingdom, and the United States, the Turkish Economic Advisory Committee was summoned over currency fears, economic recession, and threats to trade. The informal committee, made up of respected financial advisors, the governor of the central bank, and technocrats from the Kızılay began to worry that the issues in these countries were not isolated, only exacerbated by the communist revolution that continued to waste the state’s treasury amidst demanding economic results.
The soft clink of porcelain and the quiet rustle of morning newspapers fill the sunlit dining room of the Governor’s residence, nestled in the quiet heart of Ankara. A silver samovar hisses gently in the corner, filling the air with the scent of strong black tea and cardamom.
Around the polished oak table, figures chatted quietly or sat in silence reading the news, as news from abroad has arrived like storm clouds on the horizon: collapsing currencies, unpredictable markets, and a communist revolution draining coffers of the state.
The air is warm, but tense. This is no ordinary breakfast. As the last plate is served and the doors are drawn closed, Hafize looks around the room and takes the reins of the conversation.
Hafize Gaye Erkan [Governor of the Turkish Central Bank]: “Thank you for all coming today, in times of uncertainty, it is the quiet moments, like this morning's gathering, that allow us to reflect. As many of you know, recent economic tremors across Russia and India have sent the usual tremors in the British and Americans have not gone unnoticed here in Ankara. The challenges abroad, compounded by ideological shifts and internal fiscal pressures here, remind us that no nation’s economy exists in isolation.”
Mustafa Rahmi Koç [Deputy Minister of Economy and Finance]: “The economy doesn’t wait for us, Governor. To be honest. We’ve been raising this red flag over government spending for the past three months, and continuously we’ve been ignored. As you know, the British have been extremely reliant on the stock market. After all, the 1996 European Economic Crisis started because British Nexus Group officially requested a bailout due to their murky Russia acquisition. They had to have known it was toxic; the high IPO with government debt skyrocketing and inability to cover its debt, meant that it was a dumping scheme…an expensive dumping scheme. SEC in the US did not need to close trading, unlike the ‘96 crisis, which gives us hope that this economic crisis is far more contained and limited. It does look likely that France, Russia, India, and Thailand will remain in a protracted recession for much of the year. We are still waiting to see what happens in Berlin, Hong Kong, and Amsterdam, but we do expect them to weather this economic storm. Though we should expect some spikes that will cause fluctuations hitting Tokyo and London, we don’t know how significant these spikes will be or if they will drive fears in the investor markets. Director Uner at the Ministry has been monitoring the situation since August, and…unfortunately, it appears Beştepe will not take his concerns seriously. At this stage, what we are worried about is that the Communist Party here is driving our economy into a freefall and that we will face significant economic hurdles in the weeks to come.”
Ferit Sahenk [Chairman of the Doğuş Group ]: “Deputy Minister, Governor, I must confess that here on the private sector we are watching these concerns with all the more concern. We are steps away from widespread Thai-inspired redistributive economics. I believe that this administration is replacing the well-experienced conventional market experts from the Kızılay and replacing them with village fools from Thailand.”
Hafize Erkan: “I hear your concerns Ferit. I’ve expressed the Central Bank's concerns to the President. However, it appears to have fallen on deaf ears. There is even talk about introducing a token system styled on Thailand, and I can not stress the damage that will do to the lira and any semblance of private-sector-led economic growth.
Mustafa Koç: “Hafize, this is exactly the issue. Even if economically we are doing well for the time being, it is largely based on our guarantee for exports and imports, the stability of the lira at its current rate to the dollar, global economic stability, and accessibility for trade. Our debt levels are rising, and we are in a negative debt-to-credit ratio in terms of inflow versus outflow over the past two quarters. We are continuing high levels of purchasing and expenditures, only balanced by tax revenue are no longer balanced. The National Tax Service estimates ₺36.11 billion in yearly tax revenue, which, is considerable, yet, government spending and purchases slowly chip away without any consideration for that tax stream.”
Hafize Erkan: “Yes, but most of the spending is domestic, and the money ultimately returns in the form of future taxes. High government spending boosts public facilities, such as roads, schools, etc, these facilities in turn improve economic productivity. With high spending, we put our bet on future taxes that will raise the capital spent alongside PIP with the private sector over certain projects of profitability to the Anatolian Tigers. The Anatolian Tigers have an intricate web of outsourced resources and personnel that ultimately feed the stability of our economic progress. Our export-oriented model means we must continue to produce to continue to export. We need to invest in human capital and infrastructure to develop the local supply chain and maintain competitiveness with the Europeans, Japanese, and Americans.”
Daron Acemoglu [Director of TCMB;s Monetary Policy]: “Madame Governor, Russia, India, France, and even Thailand all have negative credit-to-debt ratios in the past two quarters. France was also unable to fully repay its debt for the last quarter and has continued to borrow to pay off those debts. This trend is continuing with other European countries with high spending and capital outflow, with no capital inflows…
Ferit Sahenk : “Yes, for that matter, Thailand was also unable to fully repay its debt from purchases this quarter. However, their government revenue services are not strong this year. Their economic collectivization has meant that they are likely to focus their entire budget on debt repayment. Yet, that is not what they are doing. They are still spending.”
Daron Acemoglu [Bureau Chief of BoK Monetary Policy]: “Yes, exactly, while countries have had a positive credit-debt ratio over the years, they lack the necessary capital inflow to sustain bullish government spending.”
Tayyibe Gülek [Professor of Economics from MIT]: “I would agree with Daron. However, I wish to emphasize that the debt crisis is only a crisis because it has run against the mainstream economic philosophy of fiscal restraint. I am not saying I agree with Russia or Thailand for that matter however, if we overreact, we will shake public confidence. A shake-up in public confidence will cause panic. If people get worried, they’ll stock up on dollars, removing the flow of dollars in the country, they’ll dry up the lira, and crash the Central Bank’s currency stability efforts.”
Daron Acemoglu: “Unfortunately Tayyibe this government is causing that panic for us. For heaven’s sake, they’re consulting Thailand for economic advice. What are next month’s numbers going to look like?” He asked rhetorically, looking around the room. “None of us know. The people who make economic decisions in this country are not guided by the prevailing wisdom of markets, businessmen, or economists but of theorists whose economic models have long been disproven. There is a bubble forming, and if we can’t rein in the government in then that bubble will burst. Yesyou are right that the the ‘96 crisis was exacerbated by a lack of asset-backed reserves and a reliance on speculative foreign capital. However, the current crisis is driven by high spending and low credit flow.”
Hafize Erkan “I do agree, that this round of debt crises has in large part been caused by panic and fear. In particular, the British financial system has, in my view, played an outsized role in shaping the current crisis narrative. At the height of France’s debt crisis, with over 70 billion Francs of debt and a per capita debt ratio nearing $1,700, British banks and financial institutions were uncharacteristically silent. Despite these dire circumstances, France's debt crisis did not lead to an international panic or systemic collapse. This is not to cast rocks in the direction of London. However, the reality is that if it isn’t a debt crisis, there is a significant amount of monetary-induced inflation. The circulation of money in the global economy has continued to expand while other parts of the national economy, like trade, industry, and infrastructure, have slowly crumbled.
I actually did find myself agreeing with the Chair of Russia’s Central Bank over dinner last week. The value of the British pound has grown due to an accumulation of wealth in certain sectors, particularly in the housing and financial markets. However, this wealth accumulation was not driven by productivity gains or economic efficiency but by asset inflation. When the global supply of US dollars tightened in recent years due to shifts in global capital flows, Britain's currency came under significant pressure, reflecting the long-term weaknesses of its economic structure. However, I did feel he was being unfair by not recognizing that Russia’s spending wiped out over a hundred billion in credit availability. Moreover, despite saying they would liquidate physical assets…to date, they have failed to do so.
Mustafa, I hope that the Ministry will be able to rein in the Beştepe. While I understand that we may be seen as undermining the administration's efforts to deliver on a new economic vision, and bring socialism to Turkiye. However, we are currently borrowing water while our wells are growing dry. Eventually, we will not have any water left. Where do we get the water from tomorrow? The Central Bank has a mission in this regard to stabilize the lira and ensure that the current debt crisis does not depreciate the lira. However, if the rate of extension for money borrowed abroad abruptly stops, we will have bigger issues than price stability. We’re talking about defaulting on our sovereign debt. If we default, what happens?
As Ibrahim Erdemoglu VakıfBank said plainly yesterday, if the supply of liras dries up then he won’t be guarantee export and imports or finance loans for domestic business. That kills the economic bloodline of our economy. That forces the conglomerates to shut down and go bankrupt. When the foreign investors begin pulling out, they will declare bankruptcy, and all the SMEs will be destroyed from the piling of debt. We’re holding off from raising interest rates, as Bureau Chief Han has been indicating. However, if required, we will do what is necessary to maintain the stability of the economy.”
Alev Alatlı [President of Denizbank]: “If we are being honest with ourselves, this is no longer a debate about economic policy, it is a question of ideology, and perhaps inevitability. What we're witnessing is not just a debt crisis or a currency crisis; it's the slow-motion collapse of a financial architecture that was never part of Beştepe’s vision to begin with. Conventional finance cannot survive in an unconventional economy, and make no mistake, the state’s trajectory now is nothing short of an ideological overhaul.
Tokenization, nationalization, state-labor credits are all meant to radically reshape our economy. If we abolish the lira, if we strip money of its market value and instead peg it to political loyalty or labor quotas, we will cease to exist int hat system. Banks like DenizBank or VakıfBank will be obsolete. Finance will no longer be a discipline; it will be a bureaucratic function, executed at the whim of central committees.
And maybe that is exactly what President Ayşe wants. Maybe that’s the point. You don’t need banks in a system where money no longer exists in any meaningful sense. You don’t need DenizBank if everything is centrally issued and centrally allocated. We are no longer discussing tools to stabilize the lira, we are seeing its burial.
I am not here to romanticize liberal economics or deny the failures of speculative capital. But what’s coming is not a correction; it’s a controlled demolition. The absurdity of it is breathtaking—consulting Thailand as a model while ignoring the collapse of domestic credit, the flight of capital, and the annihilation of investor confidence.
The tragedy is that we in this room are expected to act surprised when the banking sector collapses under the weight of a revolution it was never designed to survive. Perhaps the most honest thing I can say today is this If this is truly the future of the Turkish economy, then the economy, the banks, everything will fall.
Mustafa Koç: This isn’t just an economic miscalculation anymore. It’s ideological suicide. A command economy, built on theoretical blueprints, not data or markets, is being grafted onto a complex, dynamic, export-driven economy like ours. And worst of all? The government actually believes it can control every transaction, every factory, every field, from the Beştepe.
The Anatolian Tigers, the backbone of Turkish industry, are being siphoned for slaughter. Central planning doesn’t tolerate independent capital, and they know it. That’s why these firms are being surveilled, audited, and shamed in the media. It’s soft liquidation.”
Daron Acemoglu: Look at the recent debt instruments we’ve issued. There is zero investor appetite. Risk premiums are exploding. And still, Beştepe is talking about replacing currency with labor tokens? I’m sorry, labor is not a medium of exchange. It's not divisible, transferable, or durable. We’re not engineers of society. We’re servants of monetary logic. And this logic is broken.”
Ferit Sahenk: "I do agree very much, Daron. Planned economies fail not just because of mismanagement, but because they crush the essential feedback loops that allow markets to self-correct. This is why Thailand has pulled successive deficits since its communist revolution.
The Anatolian Tigers thrived because of responsiveness, quick credit, efficient subcontracting, and rapid distribution chains. Now we’re watching the state inject a bunch of yes-men communist loyalists in place of liquidity. And when the real economy slows down, which it will, the planners won’t blame themselves. They’ll blame the capitalists, and the cycle of expropriation will begin.
My father always said that no investor fears taxes, but every investor fears unpredictability. Right now, our business community doesn’t know what next month looks like. Forget five-year plans, there may not be a fifth month.
The Tigers are resourceful, yes, but they can’t survive under central rationing or price controls. They won’t be able to afford innovation. You can’t centralize entrepreneurship. If this continues, we’re not just looking at stagnation, we’re looking at a depression.”
Mustafa Koç: Unfortunately, I do not think that the Beştepe realizes that their vision is a fantasy. Those ideologues that took over are not grounded in any semblance of reality.”
Either this regime fails before the system breaks entirely, or the country breaks, and we’re left to pick up the pieces.”
Haşim Kılıç [Director for Currency Stability]: “The Beştepe inherited a modest fiscal surplus. But with another round of unchecked spending and ideological redistribution, those reserves will evaporate. Not only will we lose our buffer, but we’ll walk blindly into a sovereign debt crisis.
The budget they’re discussing, privately, allocates nearly 40% of government expenditures to ‘strategic social engineering initiatives’: tokenized labor credits, guaranteed state employment schemes, and rural commune programs. All of it unfunded. There is no cost-benefit analysis. No review from Treasury. No projections from the Central Bank.
Instead, Beştepe is surrounding itself with ideologues from Bangkok, people with no background in monetary policy, no training in economics among them. But they speak the right slogans, and they share the President’s vision of an economy run not by markets, but by decree.
They have convinced themselves that surpluses are bourgeois hoarding and that deficits are the natural state of the people’s economy. But ideology doesn’t pay for imports. It doesn’t stabilize currencies. It doesn’t put baby formula on the shelf.
The real tragedy is that the public still doesn’t fully understand what’s happening. But they will, when they go to the market and find insulin missing, or baby formula suddenly unavailable. Then the panic becomes real. As public confidence erodes, people will flee to dollars, gold, or anything that holds value. That’s not just capital flight, it’s a vote of no confidence in the lira. What follows? Capital controls? Forced currency conversions? Seizure of foreign-held assets?
Hafize Gaye Erkan]: “You are all right. This is unlike anything we’ve ever faced. With The government is openly calling for the dismantling of market systems and the nationalization of labor. I won’t sugarcoat this, the implications are catastrophic, both for our economy and the global order built around it. I want to be clear, if the new regime follows through on their rhetoric, tokenizing labor, abolishing wages, ending private capital flows, we are staring at a systemic collapse.
"You’re going to hear calls to flee, to protect assets, to go dark. But right now, we hold one last piece of leverage: confidence. If we, this room, panic, so will the markets, and when they do, it’s not just capital that evaporates. It’s food, payrolls, and pensions. I need each of you to keep your operations as stable as possible for the next 72 hours at least. We owe that to the Turkish people.
"I don’t know how long I’ll still be sitting in this chair. But while I am, the Central Bank will do its job. We will not go quietly into ideology masquerading as economics."
The soft clink of porcelain and the quiet rustle of morning newspapers fill the sunlit dining room of the Governor’s residence, nestled in the quiet heart of Ankara. A silver samovar hisses gently in the corner, filling the air with the scent of strong black tea and cardamom.
Around the polished oak table, figures chatted quietly or sat in silence reading the news, as news from abroad has arrived like storm clouds on the horizon: collapsing currencies, unpredictable markets, and a communist revolution draining coffers of the state.
The air is warm, but tense. This is no ordinary breakfast. As the last plate is served and the doors are drawn closed, Hafize looks around the room and takes the reins of the conversation.
Hafize Gaye Erkan [Governor of the Turkish Central Bank]: “Thank you for all coming today, in times of uncertainty, it is the quiet moments, like this morning's gathering, that allow us to reflect. As many of you know, recent economic tremors across Russia and India have sent the usual tremors in the British and Americans have not gone unnoticed here in Ankara. The challenges abroad, compounded by ideological shifts and internal fiscal pressures here, remind us that no nation’s economy exists in isolation.”
Mustafa Rahmi Koç [Deputy Minister of Economy and Finance]: “The economy doesn’t wait for us, Governor. To be honest. We’ve been raising this red flag over government spending for the past three months, and continuously we’ve been ignored. As you know, the British have been extremely reliant on the stock market. After all, the 1996 European Economic Crisis started because British Nexus Group officially requested a bailout due to their murky Russia acquisition. They had to have known it was toxic; the high IPO with government debt skyrocketing and inability to cover its debt, meant that it was a dumping scheme…an expensive dumping scheme. SEC in the US did not need to close trading, unlike the ‘96 crisis, which gives us hope that this economic crisis is far more contained and limited. It does look likely that France, Russia, India, and Thailand will remain in a protracted recession for much of the year. We are still waiting to see what happens in Berlin, Hong Kong, and Amsterdam, but we do expect them to weather this economic storm. Though we should expect some spikes that will cause fluctuations hitting Tokyo and London, we don’t know how significant these spikes will be or if they will drive fears in the investor markets. Director Uner at the Ministry has been monitoring the situation since August, and…unfortunately, it appears Beştepe will not take his concerns seriously. At this stage, what we are worried about is that the Communist Party here is driving our economy into a freefall and that we will face significant economic hurdles in the weeks to come.”
Ferit Sahenk [Chairman of the Doğuş Group ]: “Deputy Minister, Governor, I must confess that here on the private sector we are watching these concerns with all the more concern. We are steps away from widespread Thai-inspired redistributive economics. I believe that this administration is replacing the well-experienced conventional market experts from the Kızılay and replacing them with village fools from Thailand.”
Hafize Erkan: “I hear your concerns Ferit. I’ve expressed the Central Bank's concerns to the President. However, it appears to have fallen on deaf ears. There is even talk about introducing a token system styled on Thailand, and I can not stress the damage that will do to the lira and any semblance of private-sector-led economic growth.
Mustafa Koç: “Hafize, this is exactly the issue. Even if economically we are doing well for the time being, it is largely based on our guarantee for exports and imports, the stability of the lira at its current rate to the dollar, global economic stability, and accessibility for trade. Our debt levels are rising, and we are in a negative debt-to-credit ratio in terms of inflow versus outflow over the past two quarters. We are continuing high levels of purchasing and expenditures, only balanced by tax revenue are no longer balanced. The National Tax Service estimates ₺36.11 billion in yearly tax revenue, which, is considerable, yet, government spending and purchases slowly chip away without any consideration for that tax stream.”
Hafize Erkan: “Yes, but most of the spending is domestic, and the money ultimately returns in the form of future taxes. High government spending boosts public facilities, such as roads, schools, etc, these facilities in turn improve economic productivity. With high spending, we put our bet on future taxes that will raise the capital spent alongside PIP with the private sector over certain projects of profitability to the Anatolian Tigers. The Anatolian Tigers have an intricate web of outsourced resources and personnel that ultimately feed the stability of our economic progress. Our export-oriented model means we must continue to produce to continue to export. We need to invest in human capital and infrastructure to develop the local supply chain and maintain competitiveness with the Europeans, Japanese, and Americans.”
Daron Acemoglu [Director of TCMB;s Monetary Policy]: “Madame Governor, Russia, India, France, and even Thailand all have negative credit-to-debt ratios in the past two quarters. France was also unable to fully repay its debt for the last quarter and has continued to borrow to pay off those debts. This trend is continuing with other European countries with high spending and capital outflow, with no capital inflows…
Ferit Sahenk : “Yes, for that matter, Thailand was also unable to fully repay its debt from purchases this quarter. However, their government revenue services are not strong this year. Their economic collectivization has meant that they are likely to focus their entire budget on debt repayment. Yet, that is not what they are doing. They are still spending.”
Daron Acemoglu [Bureau Chief of BoK Monetary Policy]: “Yes, exactly, while countries have had a positive credit-debt ratio over the years, they lack the necessary capital inflow to sustain bullish government spending.”
Tayyibe Gülek [Professor of Economics from MIT]: “I would agree with Daron. However, I wish to emphasize that the debt crisis is only a crisis because it has run against the mainstream economic philosophy of fiscal restraint. I am not saying I agree with Russia or Thailand for that matter however, if we overreact, we will shake public confidence. A shake-up in public confidence will cause panic. If people get worried, they’ll stock up on dollars, removing the flow of dollars in the country, they’ll dry up the lira, and crash the Central Bank’s currency stability efforts.”
Daron Acemoglu: “Unfortunately Tayyibe this government is causing that panic for us. For heaven’s sake, they’re consulting Thailand for economic advice. What are next month’s numbers going to look like?” He asked rhetorically, looking around the room. “None of us know. The people who make economic decisions in this country are not guided by the prevailing wisdom of markets, businessmen, or economists but of theorists whose economic models have long been disproven. There is a bubble forming, and if we can’t rein in the government in then that bubble will burst. Yesyou are right that the the ‘96 crisis was exacerbated by a lack of asset-backed reserves and a reliance on speculative foreign capital. However, the current crisis is driven by high spending and low credit flow.”
Hafize Erkan “I do agree, that this round of debt crises has in large part been caused by panic and fear. In particular, the British financial system has, in my view, played an outsized role in shaping the current crisis narrative. At the height of France’s debt crisis, with over 70 billion Francs of debt and a per capita debt ratio nearing $1,700, British banks and financial institutions were uncharacteristically silent. Despite these dire circumstances, France's debt crisis did not lead to an international panic or systemic collapse. This is not to cast rocks in the direction of London. However, the reality is that if it isn’t a debt crisis, there is a significant amount of monetary-induced inflation. The circulation of money in the global economy has continued to expand while other parts of the national economy, like trade, industry, and infrastructure, have slowly crumbled.
I actually did find myself agreeing with the Chair of Russia’s Central Bank over dinner last week. The value of the British pound has grown due to an accumulation of wealth in certain sectors, particularly in the housing and financial markets. However, this wealth accumulation was not driven by productivity gains or economic efficiency but by asset inflation. When the global supply of US dollars tightened in recent years due to shifts in global capital flows, Britain's currency came under significant pressure, reflecting the long-term weaknesses of its economic structure. However, I did feel he was being unfair by not recognizing that Russia’s spending wiped out over a hundred billion in credit availability. Moreover, despite saying they would liquidate physical assets…to date, they have failed to do so.
Mustafa, I hope that the Ministry will be able to rein in the Beştepe. While I understand that we may be seen as undermining the administration's efforts to deliver on a new economic vision, and bring socialism to Turkiye. However, we are currently borrowing water while our wells are growing dry. Eventually, we will not have any water left. Where do we get the water from tomorrow? The Central Bank has a mission in this regard to stabilize the lira and ensure that the current debt crisis does not depreciate the lira. However, if the rate of extension for money borrowed abroad abruptly stops, we will have bigger issues than price stability. We’re talking about defaulting on our sovereign debt. If we default, what happens?
As Ibrahim Erdemoglu VakıfBank said plainly yesterday, if the supply of liras dries up then he won’t be guarantee export and imports or finance loans for domestic business. That kills the economic bloodline of our economy. That forces the conglomerates to shut down and go bankrupt. When the foreign investors begin pulling out, they will declare bankruptcy, and all the SMEs will be destroyed from the piling of debt. We’re holding off from raising interest rates, as Bureau Chief Han has been indicating. However, if required, we will do what is necessary to maintain the stability of the economy.”
Alev Alatlı [President of Denizbank]: “If we are being honest with ourselves, this is no longer a debate about economic policy, it is a question of ideology, and perhaps inevitability. What we're witnessing is not just a debt crisis or a currency crisis; it's the slow-motion collapse of a financial architecture that was never part of Beştepe’s vision to begin with. Conventional finance cannot survive in an unconventional economy, and make no mistake, the state’s trajectory now is nothing short of an ideological overhaul.
Tokenization, nationalization, state-labor credits are all meant to radically reshape our economy. If we abolish the lira, if we strip money of its market value and instead peg it to political loyalty or labor quotas, we will cease to exist int hat system. Banks like DenizBank or VakıfBank will be obsolete. Finance will no longer be a discipline; it will be a bureaucratic function, executed at the whim of central committees.
And maybe that is exactly what President Ayşe wants. Maybe that’s the point. You don’t need banks in a system where money no longer exists in any meaningful sense. You don’t need DenizBank if everything is centrally issued and centrally allocated. We are no longer discussing tools to stabilize the lira, we are seeing its burial.
I am not here to romanticize liberal economics or deny the failures of speculative capital. But what’s coming is not a correction; it’s a controlled demolition. The absurdity of it is breathtaking—consulting Thailand as a model while ignoring the collapse of domestic credit, the flight of capital, and the annihilation of investor confidence.
The tragedy is that we in this room are expected to act surprised when the banking sector collapses under the weight of a revolution it was never designed to survive. Perhaps the most honest thing I can say today is this If this is truly the future of the Turkish economy, then the economy, the banks, everything will fall.
Mustafa Koç: This isn’t just an economic miscalculation anymore. It’s ideological suicide. A command economy, built on theoretical blueprints, not data or markets, is being grafted onto a complex, dynamic, export-driven economy like ours. And worst of all? The government actually believes it can control every transaction, every factory, every field, from the Beştepe.
The Anatolian Tigers, the backbone of Turkish industry, are being siphoned for slaughter. Central planning doesn’t tolerate independent capital, and they know it. That’s why these firms are being surveilled, audited, and shamed in the media. It’s soft liquidation.”
Daron Acemoglu: Look at the recent debt instruments we’ve issued. There is zero investor appetite. Risk premiums are exploding. And still, Beştepe is talking about replacing currency with labor tokens? I’m sorry, labor is not a medium of exchange. It's not divisible, transferable, or durable. We’re not engineers of society. We’re servants of monetary logic. And this logic is broken.”
Ferit Sahenk: "I do agree very much, Daron. Planned economies fail not just because of mismanagement, but because they crush the essential feedback loops that allow markets to self-correct. This is why Thailand has pulled successive deficits since its communist revolution.
The Anatolian Tigers thrived because of responsiveness, quick credit, efficient subcontracting, and rapid distribution chains. Now we’re watching the state inject a bunch of yes-men communist loyalists in place of liquidity. And when the real economy slows down, which it will, the planners won’t blame themselves. They’ll blame the capitalists, and the cycle of expropriation will begin.
My father always said that no investor fears taxes, but every investor fears unpredictability. Right now, our business community doesn’t know what next month looks like. Forget five-year plans, there may not be a fifth month.
The Tigers are resourceful, yes, but they can’t survive under central rationing or price controls. They won’t be able to afford innovation. You can’t centralize entrepreneurship. If this continues, we’re not just looking at stagnation, we’re looking at a depression.”
Mustafa Koç: Unfortunately, I do not think that the Beştepe realizes that their vision is a fantasy. Those ideologues that took over are not grounded in any semblance of reality.”
Either this regime fails before the system breaks entirely, or the country breaks, and we’re left to pick up the pieces.”
Haşim Kılıç [Director for Currency Stability]: “The Beştepe inherited a modest fiscal surplus. But with another round of unchecked spending and ideological redistribution, those reserves will evaporate. Not only will we lose our buffer, but we’ll walk blindly into a sovereign debt crisis.
The budget they’re discussing, privately, allocates nearly 40% of government expenditures to ‘strategic social engineering initiatives’: tokenized labor credits, guaranteed state employment schemes, and rural commune programs. All of it unfunded. There is no cost-benefit analysis. No review from Treasury. No projections from the Central Bank.
Instead, Beştepe is surrounding itself with ideologues from Bangkok, people with no background in monetary policy, no training in economics among them. But they speak the right slogans, and they share the President’s vision of an economy run not by markets, but by decree.
They have convinced themselves that surpluses are bourgeois hoarding and that deficits are the natural state of the people’s economy. But ideology doesn’t pay for imports. It doesn’t stabilize currencies. It doesn’t put baby formula on the shelf.
The real tragedy is that the public still doesn’t fully understand what’s happening. But they will, when they go to the market and find insulin missing, or baby formula suddenly unavailable. Then the panic becomes real. As public confidence erodes, people will flee to dollars, gold, or anything that holds value. That’s not just capital flight, it’s a vote of no confidence in the lira. What follows? Capital controls? Forced currency conversions? Seizure of foreign-held assets?
Hafize Gaye Erkan]: “You are all right. This is unlike anything we’ve ever faced. With The government is openly calling for the dismantling of market systems and the nationalization of labor. I won’t sugarcoat this, the implications are catastrophic, both for our economy and the global order built around it. I want to be clear, if the new regime follows through on their rhetoric, tokenizing labor, abolishing wages, ending private capital flows, we are staring at a systemic collapse.
"You’re going to hear calls to flee, to protect assets, to go dark. But right now, we hold one last piece of leverage: confidence. If we, this room, panic, so will the markets, and when they do, it’s not just capital that evaporates. It’s food, payrolls, and pensions. I need each of you to keep your operations as stable as possible for the next 72 hours at least. We owe that to the Turkish people.
"I don’t know how long I’ll still be sitting in this chair. But while I am, the Central Bank will do its job. We will not go quietly into ideology masquerading as economics."
