Talking Turkey
It seemed a sure thing. Turkey was the great exception to the dreary tale of economically dysfunctional Muslim countries. A candidate for membership in the European Union, a long-time member of NATO, a “secular” Islamic state, all spoke in Turkey’s favor as far as geopolitical factors are concerned.
Economically, the fundamentals seemed sound. Growth had recovered from a slump in 2009, the government debt was only in the 40%-plus area of GDP, and the currency was looking strong against the euro, which at the end of 2012 was on a clear weakening trend.
Kerem Uzel/Bloomberg
For somebody looking to invest euros, Turkish government CDs certainly looked like a sure thing. Not only was the lira appreciating against the euro, but the interest rate being offered on a three-month CD was 6.15%. So of course I took the plunge.
The new Alvarado strategy was initiated on November 23rd 2012, roughly where the first green line appears on the accompanying graph, which shows the lira/euro exchange rate. And for some time, it appeared to be a golden move.
But never underestimate the ability of politicians to throw a monkey wrench in economic fundamentals. We all knew about the conflicts between the Islamicist-leaning civilian government and the secularist-leaning military. But I didn’t realize how much resentment had been building up against the government among the grass-roots civilian population. This resentment exploded towards the end of May, resulting in a collapse of the lira against the euro.
Of course, this also threw a monkey wrench in my rosy scenario for investment returns. My final CD expired at the beginning of June, roughly where the second green line appears on the chart. If only those riots had started a couple of weeks later, I’d have had a tidy sum accumulated. As it stands, I pretty much broke even, for which I am thankful.
The moral of the story is, investing in emerging markets comes with risks all their own, that are often unforeseeable. Caveat emptor. But what is one to do, in the context of negative real interest rates in the developed countries?
Like John Carter, Ruben Alvarado is an expatriate Virginian living on another planet – not Mars, but the Netherlands. A graduate of the forestry school at Virginia Tech, Alvarado was a Peace Corps volunteer before moving to the Netherlands. There he began work as a translator for an investment news agency. He has since branched out into writing and publishing, and is the proprietor of WordBridge Publishing, a publisher of books emphasizing Christianity and the common law. His most recent book is “Follow the Money: The Money Trail through History,” which narrates the various forms and stages money has taken through the ages, and highlights why the tale is so important. Alvarado lives in Aalten, the Netherlands, with his wife and three children.
Trending Now on Affluent Christian Investor
If Elizabeth Warren Really Was An Indian, She’d Know Not To Trust The Federal Government
Liberty To License
Two Years Of Global Cooling But Cuomo Attacks Energy Anyway
By Persecuting Christians, Xi Is Risking His Own Regime
The Real Divide In U.S. Is Not Between Liberal And Conservative, But Between Informed And Ignorant
Nude is Natural: Should Clothing be Optional?
Last Quarter Markets Got De-FAANGed
The Futility of Managing Your Own Reputation
Sermon On The Mount vs. Sermon On The Plain: Different Messages For Different Economies
The American Covenant: How American Independence Arose from the Colonial Pulpits
What Christian Leaders Usually Fail To Understand About Economics
Michael Novak Anticipated ObamaCare Thirty Years Ago
How Bolsonaro Effect Saved Brazil’s Plunging Markets
Our Society Is A Shame Factory
Warnings From A Past Pope And A President About Socialism
Why The Founding Fathers Despised Democracy
The Ebola Epidemic Is Dying
Follow Us
The Affluent Mix
Liberty To License February 19, 2019 | Terry Applegate
If Elizabeth Warren Really Was An Indian, She’d Know Not To Trust The Federal ... February 18, 2019 | Roger McKinney
By Persecuting Christians, Xi Is Risking His Own Regime... February 18, 2019 | Jerry Bowyer
The Real Divide In U.S. Is Not Between Liberal And Conservative, But Between Inf... February 18, 2019 | Frank Vernuccio
Freedom Is The Solution To Obesity February 18, 2019 | Jim Huntzinger
Our Society Is A Shame Factory February 18, 2019 | David Gornoski
The Flamboyant Absurdity Of ‘Modern Monetary Theory’... February 18, 2019 | John Tamny
Two Years Of Global Cooling But Cuomo Attacks Energy Anyway... February 4, 2019 | Frank Vernuccio
Wealth Equality = Stealing February 4, 2019 | Jim Huntzinger
What Christian Leaders Usually Fail To Understand About Economics... February 4, 2019 | Roger McKinney
Last Quarter Markets Got De-FAANGed February 4, 2019 | Jerry Bowyer
Warnings From A Past Pope And A President About Socialism... January 25, 2019 | Jim Huntzinger
Parliament Brexit Rejection Is Continuation Of Elites Rejecting Popular Opinion... January 25, 2019 | Frank Vernuccio
More Tuckerism: ‘Conservative’ Journal Blames Markets For Social Ills... January 25, 2019 | Roger McKinney
One Year Later And The Trump Tax Cut Boom Seems To Be Petering Out... January 25, 2019 | Jerry Bowyer
No, NY Times, A Government Shutdown Won’t Shrink Economic Growth... January 17, 2019 | John Tamny
Tucker Carlson Serves Up Warmed Over Socialism... January 17, 2019 | Roger McKinney
Media Ignores Socialism As Reason For Venezuelan Crisis... January 17, 2019 | Frank Vernuccio
Brazil’s New President Embraces Israel (Literally) And Is World’s Best Perfo... January 17, 2019 | Charles Bowyer
Who Says States Can Nullify Federal Overreach? Madison And Jefferson... January 17, 2019 | Jim Huntzinger
Why Big Funds Overlook Places Like Columbus And Why They Shouldn’t... January 17, 2019 | Jerry Bowyer
AD or ADD: 2019 Years From What? January 4, 2019 | Jerry Bowyer
Join the conversation!
We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse.