The weakness of being strong.

Yesterday Trump doubled tariffs on aluminium and steel imports from Turkey. The Turkish lira slumped by 20%. Turkish President Erdogan asked his followers "to exchange their dollars, euros and gold for Turkish lira" but how many follow his call remains to be seen. Turkey is holding US pastor Andrew Brunson under house arrest, accusing him of links with the Kurdish Workers Party and the Gulenist movement, both classified as terrorist organisations by the Turkish government. Earlier this month the US levied sanctions against Turkish Minister of Justice A Gul and Minister of Interior S Soylu. As a member of NATO Turkey should be an ally of the US, but relations have soured because the US refuses to extradite Fethullah Gulen, a preacher with a large following, who lives in the US. Erdogan initially won power with Gulen's help but blamed Gulen for conspiring against him when caught in a corruption scandal. Then came the staged coup in 2016 which Erdogan used for purging and imprisoning thousands of suspected Gulen supporters. Gulen has strenuously denied any part in the coup attempt. Erdogan has been demanding extradition of Gulen from the US but has to prove his case in a US court. That would take time and a lot of expense and may not be successful, so he decided to arrest the pastor and use him for exchange. The US does not give in to a hostage situation easily, hence the tariffs. Erdogan has been winning elections by generating growth by borrowing abroad and is facing refinancing of $230 billion this year. Inflation is in excess of 15%, yields on 10-year bonds is at 18% and Erdogan is totally against raising interest rate, "Because my belief is: interest rates are the mother and father of all evil." Erdogan can bully anyone at home but finance is international and he will soon learn that he cannot stop US Federal Reserve from raising rates which will hammer the lira even further. Meanwhile, Turkey's neighbor Iran revealed that it rejected 8 requests for meetings by US President Donald Trump. The Iranian rial fell lower than 100,000 to the dollar as Trump announced renewal of sanctions on Iran. Sanctions on Iran resumed a few days ago. Why did Iran refuse Trump's invitations to meet? Because moderates did not want to admit that they made a bad deal and the hardliners were against any deal all along. The ruble and the Russian stock market fell as Trump levied further sanctions on Russia in response to a staged Novichok attack on a Russian traitor skulking in the UK. A weak man can become strong but a strongman can never appear weak. Trump has humbled a lot of strongmen. He better watch out.