It is still up in the air whether the failed coup that took place earlier this year in Turkey was from an outside agency, an Erdogan created false flag, or a grass roots engineered event. But whatever the reason, the leader of Turkey has used this attempt to oust him from power as the impetus to initiate a pivot away from the U.S..
Shortly after the coup attempt back in July, Erdogan purged the government of any pro-U.S. officials and even threatened the long-standing NATO base housed in Ankara. This of course forced Washington to move their missile cache held in Ankara to other locations, and for all intents and purposes exit a key regional position on the frontier of Russia which was had been used to try to isolate the Eurasian power.
But now it appears that this was just the first step by Erdogan in a new foreign policy where he is seeking to disassociate the country completely from the United States, and to solidify even greater ties with Russia and their growing Eurasian Economic Union (EEU). And to do this he is now calling on all of Turkey's businesses and citizens to dump their dollar holdings and use the proceeds to buy gold or Lira as the end game looks to be a move towards establishing direct bi-lateral trade with Eurasia without the need for the U.S. dollar as a reserve currency medium.
Normally, any other country would find itself in a dilemma: how to lower rates as per the president's demands to stimulate investment and the economy, without killing the economy... but not Erdogan. As AFP notes, the Turkish president "urged" his fellow Turks on Friday to convert their foreign currencies into gold and lira to stimulate the country's economy as the lira continued its slide against the dollar.
"For those who have foreign currencies under the pillow, come change this to gold, come change this to Turkish lira. Let the lira win greater value. Let gold win greater value," he said during a televised speech in Ankara. - Zerohedge
Thus the inevitable answer for Turkey (and others) appears to be in disassociating themselves completely from the dollar, and in negotiating new trade agreements in partnerships such as the EEU, through which they can use their own currencies that bypass the dollar.
"For those who have foreign currencies under the pillow, come change this to gold, come change this to Turkish lira. Let the lira win greater value. Let gold win greater value," he said during a televised speech in Ankara.
Then overnight, Turkey continued its crusade against high rates, so critical to keep the currency from foundering, when it announced it would prevent companies from borrowing at high rates. The measure will be part of a broader package of economic steps due to be announced Thursday, according to state-run Anadolu Agency which cited Deputy PM Veysi Kaynak as saying in an interview on CNNTurk.
“The rise in the dollar is certainly important, but the rise in interest is affecting our companies very quickly.” He added that the “prime minister will explain a package of measures that will touch the daily lives of our people,” and “relieve our companies financially,” including our banks."
It was not exactly clear how government pressure to lower rates would help the plunging currency, however, in a surprising twist, one which likely seeks to isolate the Turkis Lira from its dependency on the US dollar, Erdogan said on Sunday that Turkey is taking steps to allow commerce with China, Russia and Iran to be conducted in local currencies, in what Reuters dubbed "the government's latest effort to shore up the tumbling lira."
Speaking at the opening ceremony of a shopping mall in Istanbul, Erdo?an said that he had proposed Russian President Vladimir Putin to conduct trade between the two countries with local currencies. - Zerohedge