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| The Grand Turk |
| Egypt and Turkey: Middle East Basket Cases |
| 2011-11-23 |
| The mainstream media has finally picked up the story I’ve been telling since February about Egypt’s impending economic collapse. The country is nearly out of money. ...Egypt’s spendable foreign exchange reserves are down to just $13 billion and falling daily as the central bank buys its own unwanted currency from the market in order to postpone the inevitable collapse in the change rate. Why not just devalue? The probable answer is that the generals and their civilian front men are moving as much money as they can out of the country before Egypt goes bankrupt....Not only the country’s capacity to buy food in the future, but its existing stocks of food are disappearing. And Egypt imports half its caloric consumption. ...Turkey is in no danger of starvation, to be sure, but it faces a severe economic setback: Tayyip Erdogan, the country’s Islamist prime minister, spurred the country’s banks to lend huge amounts to consumers in advance of last June’s national elections. Bank lending rose by 40% in 2010 and by another 40% in 2011, and Turks bought consumer goods from abroad, running up a balance of payments deficit exceeding 10% of GDP (the same level as Greece). Most of that is financed by short-term debt. Turkey won’t go bankrupt — it’s overall debt levels are manageable — but its economy will have to shrink by a good 5% to staunch the bleeding. That will deflate the neo-Ottoman balloon that Erdogan has been floating, and make it much harder to suppress Turkish grievances in the impoverished Eastern corner of the country. There is no center of power, no reorientation, no neo-Ottoman empire, no Shi’ite crescent, no Arab Spring, no coherent description of what is occurring in the Middle East. There is only catastrophic social breakdown, civil unrest, despair and violence. If Iran gets nuclear weapons, they will be used. We cannot fix the Middle East. We can only protect ourselves from the fallout, starting with acquisition of WMD by a terrorist state. The last sentence of my book How Civilizations Die (and why Islam is Dying, Too) quotes Virgil’s warning to Dante in Canto III of the Inferno: Non ragionam da lor, ma guarda e pasa. Nothing to see here, folks. Keep moving. |
| Posted by:g(r)omgoru |