Inflation in Turkey is an example of why we need Bitcoin
More and more expensive grocery stores, wages unable to keep up and the desperation of the population are proof of the need for a decentralized currency.
Turkey is a warning and perhaps a harbinger of things to come for other countries whose currencies are weakening. The Turkish lira has fallen almost 45% against the dollar so far this year and has fallen as much as 20% in one week. Economists believe Turkey could be on the verge of hyperinflation, as the year-to-year consumer price index could end up exceeding 30% in the coming months.
While experts accuse the Central Bank of the Republic of Turkey of not raising interest rates, people like Tal are suffering the consequences of double-digit inflation. Tal (name changed to protect his identity) who works at a global cafe in Turkey, observed: “In the first week of January 2021, I was making around 4,774 lire (or $ 360), but in November, it was about 2,917 lire. (or $ 220). If I wanted to drink a big caramel nut latte, I would have to pay about 25% of what I earned that day.
For those who haven’t experienced the kind of inflation Tal lives with, he shared some of the dramatic changes in food prices: A tin of vanilla sandwich cookies went from 5.75 lire in September to 8.50 lire in November 2021; in many places the price of infant formula has doubled. “People need to understand how bad the economy is here. I think Bitcoin is the solution. In Turkey we now have over 5 million people investing in bitcoin and cryptocurrencies, ”said Tal. “I’m trying to save as much money as possible for bitcoin, because bitcoin is the best solution.”
Retirees with limited monthly incomes and civil servants have also had similar experiences. Grocery prices have soared so quickly that a purchase of tomato paste, bread, yogurt, juice and crackers costs over 46 lire. For a family living on a monthly income of 2,500 lire, eating is prohibitive. Although Erdogan recently raised the salaries of many civil servants by almost 30%, it has done little to counter soaring inflation.
“Let the president come here and go shopping with us. ”
The escalating cost of living in Turkey has led to more protests and dissent in the country, which is known to stifle opposing views and detain political opponents. Recently, President Erdogan arrested Metin Gurcan, a leading member of an emerging opposition group, the Democracy and Progress Party (DEVA), on charges of espionage. Even with the threat of being arrested, officials still intend to demonstrate in Diyarbakir, Izmir, Istanbul and Ankara. Mehmet Bozgeyin of the Confederation of Public Service Trade Unions (KESK) called the government’s economic policies a coup against the people and said: “Every day we wake up with price increases. We have found ourselves in a situation where we cannot meet our basic needs. “
Worse yet, shortages are occurring in imported drugs, medical equipment and electronics. Bakeries are threatening to close as ingredients for making bread have become too expensive to obtain. Even Abdulkadir Selvi, an otherwise pro-government supporter of the Turkish daily Hurriyet Daily News, expressed concern about the current economic development, saying that “the economic turmoil has broad political consequences. [that] we cannot ignore.
With elections slated for June 2023 and no direct way to oppose President Erdogan’s stance on lowering interest rates as a long-term solution to inflation, opposing political factions have few options to bring about the Turkish central bank to change its economic policy. President Erdogan credited Turkey’s recent GDP growth of 7.4% and the fact that its current account is in surplus as a sign that its policies are working. In USD, Turkey had a current account surplus of $ 1.7 billion in September 2021, compared to a deficit of $ 2.3 billion in the same month last year. Tourism is also booming in Turkey.
“We refuse the policy of attracting hot flows of money with high interest rates,” President Erdogan said in an interview with a state broadcaster. He expressed his contempt for the IMF, saying: “Turkey will never again subject its political and economic future to the prescriptions of institutions with global economic control, such as the IMF and similar institutions. On the impeachment of Finance and Treasury Minister Lütfi Elvan for opposing his policy of lowering interest rates, President Erdogan expressed hope that the economy will improve over time while keeping interest rates low. “Interest rates are the reason, inflation is the result.” He called the rate cuts an “economic liberation war” for Turkey, and called on the public to remain calm and “not stray from common sense” when buying foreign currency. , pricing and purchasing.
As for Tal, the motorcycle he hoped to buy from a local dealership to go to work and shop for his family now costs 15,950 lire, more than 3,950 lire more than in September. He decided to postpone the purchase. For now, in this time of economic volatility in Turkey, Tal will continue to buy and hold bitcoin to preserve his savings and hope for a better future.
This is a guest article by SJ Ware. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.