Turkey 's High 30% Interest Rate Did not Stop Inflation

https://youtu.be/sdCS_CP4rcQ

I thought Turkey 's interest rate is low but more than 30% is extremely high. Lowering it by 10% is still 20%, still high. So the reason is not low interest rate. It is subsidies. 50% of Turkish budget is spent on Subsidies. Subsidies increase consumption but reduces production, making inflation worse, and export values less. WTO shows that subsidies do not help the exporting nations. It could be due to the lower GDP exported. Subsidies are removed from exports. The solution is simple. Remove all subsidies, increase taxes on consumption, and use the money for cash transfers to reduce burden of living. Price will rise initially, but high prices will stop excessive consumption, and thus cap the inflation. If Malaysia follows the Turkish way, even increasing its interest rates to the Turkish level, while increasing subsidies to 50% of the budget like Turkey, Malaysia will suffer the same fate as Turkey and Sri Lanka.https://youtu.be/sdCS_CP4rcQ

This shows how corrupt journalists and economists had become. They keep on blaming Erdogan's lowering of interest rates that made the inflation in Turkey worse. I was very suspicious but as an engineer, I wait for actual interest rate fogures. As an amateur economist, it is difficult for me to get readily available data on the actual interest rate and other figures. Fortunately, this economics Youtube channel, Joe Blogs have given the actual interest rates Turkey and I was shocked. 30% interest tate is still considered small by these economists? No wonder the same high i terest rates in Zimbably and Sri Lanka were not discussed in detail, except that they had increased interest rates, but how much were not stated in the mainstream media.

The conclusion for any fair minded person is yhat high interest rates failed to stop high inflation but these nations share something similar, high subsidies. High subsidies are also used to control inflation but it caused a lot of side effects that most probably it will increase even more inflation, as shown by some studies on interest rates for inelastic supplies.

Comments

Post a Comment

Popular posts from this blog

Ir. Hj. Othman Hj. Ahmad Resume

Image
My resume is not just getting certifiates but getting the best results in the state of Sabah. Also at a course at City Univeristy of London in 1981. I am not sure if I were the best at Swansea College of Further Education where I got 4A and 1B in just one year of a 2-year course because there is no official statement on this but among my batch, it could be the best. My target has always been the best in the world, but I always failed but ended up being the best in the state or a group of students.     BSc(Hons) course List of students in the same course, Electrical and Electronic Engineering     SRP 1974 Daily Express, 23 March 1977, Jabatan Arkib Certified      Cambridge School Certificate, 1976     Reported in Chinese Newspaper in Sandakan Google Translate: Othman 5 points, classmate Hsu Chi Ming 6 points, 1st and 2nd in Sabah. Hsu Chi Ming was my best friend in class and we discussed a lot. Daily Express, 23 March 1977 Daily Express, 23 Ma...
Read more

Penyelesaian Masalah Letrik dan Air di Sabah

 Punca utama ialah tidak cukup peruntukan dari hasil Negara Sabah. Terlalu banyak di rampas oleh Malaysia iaitu Malaya. Kalau Sabah di peruntukan sama rata dengan Malaysia, tiada masalah, tapi sudah berpuluh tahun di peruntukkan kurang separuh dari Malaysia untuk seorang penduduk. Kenapa pentingnya duit? Perlu sediakan Leyrik lebih dari 100% sebagai back-up. Negara maju semua ada sekurang-kurangnya 30% lebihan kuasa janakuasa Eletrik, dan talian metrik. Kalau satu laluan putus, ada satu lagi. Di pantai timur Sabah ada 3 laluan dari Pantai Barat. Dari Ranau, Pitas dan Kalabakan. Bekalan air serupa juga. Mesti lebih dari 100% bekalan lah  Sama juga dengan paip-paip. Penyelesaian cara Islam ialah dengan menghapuskan Subsidi tapi di ganti dengan bayaran duit terus. Daripada duit di beri kepada pembekal Letrik, beri duit terus kepada semua rakyat sama rata.  Tapi, harga letrik di biarkan naik lah.
Read more