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
Tlaib’s Trillion Dollar Coin Hoax
The 1619 Fraud
Who To Talk To Instead Of Talking To Yourself
China Concealed COVID-19, Just Like It Did SARS
Conspiracy Theories, Sloppy Math, And Other Things To Avoid During A Pandemic
We’ll Get Through This Despite, Not Because Of, Government Spending
This App Exposes Left-Wing Companies
Did Jesus Boycott Sinful Businesses Or Engage With Them?
Premature Ending Of Quarantine = Death Panels
Businesses Are The Horse, Ministries Are The Wagon
Solomon And The Pandemic
The American Covenant: How American Independence Arose from the Colonial Pulpits
How The Left Took Over Corporations, And What We Can Do To Stop Them
FDR Takes Lessons From Wilson
Why Billy Graham and I Read Revelation Differently
OT Tithe System Aligned The Interests Of Priests With Members
Twitter Censorship Is More Than Just Bias, It’s Misuse Of Shareholder Resources
Follow Us
The Affluent Mix
Tlaib’s Trillion Dollar Coin Hoax April 7, 2020 | Roger McKinney
The 1619 Fraud April 7, 2020 | Frank Vernuccio
President Trump, Fundamentally Transform Entrepreneurial Rules For The Better... April 7, 2020 | Kevin Cullis
Jesus vs. Boycotts, The Prostitute And The Perfume... April 7, 2020 | Jerry Bowyer
Did Jesus Boycott Sinful Businesses Or Engage With Them?... April 7, 2020 | Jerry Bowyer
The Clash Of Two Worldviews: Statism And Liberty... April 7, 2020 | Jim Huntzinger
We’ll Get Through This Despite, Not Because Of, Government Spending... April 2, 2020 | Daniel McLaughlin
Let’s Please Not Insult ‘Stimulus’ By Calling This ‘Stim... April 2, 2020 | John Tamny
Conspiracy Theories, Sloppy Math, And Other Things To Avoid During A Pandemic... April 2, 2020 | Jerry Bowyer
COVID-19 And The Rise Of Christian Entrepreneurship... April 2, 2020 | Kevin Cullis
China Concealed COVID-19, Just Like It Did SARS... April 2, 2020 | Frank Vernuccio
FDR Takes Lessons From Wilson April 2, 2020 | Jim Huntzinger
Solomon And The Pandemic April 2, 2020 | Mark Horne
Premature Ending Of Quarantine = Death Panels... March 26, 2020 | Jerry Bowyer
Panic Doesn’t Suspend Economic Laws March 26, 2020 | Daniel McLaughlin
Factions Can’t Work Together Because We Have Different Goals... March 26, 2020 | Frank Vernuccio
Debt Be Damned March 26, 2020 | Michael Pento
A Bridge Loan Too Far Blows Up World Bond Markets... March 26, 2020 | David Goldman
The Malicious Symbol Of The Blue Eagle March 26, 2020 | Jim Huntzinger
A Few Questions For The Many Critics Of The Gold Standard... March 26, 2020 | John Tamny
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.