All eyes are on the Turkish lira, the currency of Turkey. Its decline has been precipitous—it has already lost over 40 percent of its value against the U.S. dollar this year. For Turkey, which has relied upon the inflow of foreign credit, this poses terrible risks. Enormous debt coupled with a vicious attack for political reasons on the Turkish economy by the U.S. government has set Turkey toward the precipice. Will Turkey’s descent take Europe with it and then, certainly, other middle-income countries? Is this the harbinger of a new global financial crisis that would be far more dangerous than the one in 2007-08?
Could Turkey Trigger the Next Global Financial Crisis?