Page 7 - TURKRptDec21

2.0 Politics 2.1 Watchlist
● Global liquidity: The Fed’s balance sheet is still breaking records.
The USD index (DXY) moved up into the 96s after the Fed said on November 3 that it would cut its monthly net money printing volume by $15bn to $90bn in December from $105bn in November.
The Fed also aims to cut its monthly money printing volume by $15bn each month after December. If the path taken is successful, net money printing will reach zero in July.
July is more than seven months away. It’s a long time when it comes to the markets, plenty could change.
On December 15, the Fed’s open market committee will announce the results of its next meeting.
The new year markets rally is awaited in December; it normally lasts till February.
Amid the growing “tapering” talk, Congress continues to chew over the Biden administration’s expenditure packages, including $1 trillion worth of infrastructure investments and a $3.5 trillion budget bill.
Discussions over the tax hike plans continue.
The plan is to pump money via fiscal policy instead of monetary policy. However, there is growing and visible inflation now; it was previously ‘stored’ in the form of asset price bubbles during the longer-than-a-decade money printing superboom.
Via fiscal or monetary policy, the money printing must proceed; no-one can contemplate stopping it until inflation gets out of control.
● Virus: Austria declared a lockdown. Germany was thinking of joining it. South Africa identified on November 24 a new variant, Omicron. Turkey is paying little heed to the threat of the pandemic.
● Halkbank case: On October 22, the 2nd US Circuit Court of Appeals rejected Halkbank's bid to dismiss an indictment accusing the bank of assisting Iran in the evasion of American sanctions. Halkbank
7 TURKEY Country Report December 2021 www.intellinews.com