On Sunday, President Recep Tayyip Erdogan described the US as behaving like "wild wolves" and said Ankara would pursue non-dollar trade transactions with Russia and other countries in a bid to bypass the dollar's global dominance.
The lira has plunged after the US targeted the Turkish currency as part of a row over a US pastor, Andrew Brunson, who was arrested in October 2016 over aiding an organization led by Islamic preacher Fethullah Gulen, who Ankara believes was behind the attempted coup in July that year. Gulen is living in exile in the US.
Erdogan: The S400 is a done deal, oh by the way, I’m abandoning the dollar on international trade— Harry Theocharous (@TheocharousH) 3 September 2018
Trump: Go ahead, make my day@RT_Erdogan @realDonaldTrump
*Press play for sound watch to the end pic.twitter.com/96LTgHNMuK
According to Nairobi-based political and economic analyst Aly-Khan Satchu,the Trump administration is being increasingly belligerent in its foreign policy.
"The dollar is a weapon and Trump is relishing his financial warfare strategies," Mr. Satchu told Sputnik.
'Golden Flood of Dollar Liquidity' Is Over
"We have exited a period 'when the living was easy' and the world was awash with a golden flood of dollar liquidity. Many policy-makers imbibed the 'Kool-Aid' and believed in this 'new normal'," Mr. Satchu told Sputnik.
"Now we are reverting back to the status quo ante, the tide has now reversed. Oresident Erdogan's voodoo economics worked in the time of the golden flood of liquidity but under today's less benign conditions no-one except die-hard Erdogan-supporting Turkish nationalists is prepared to throw good money after money gone bad on the basis of Erdogan's hocus pocus monetary policy," Mr. Satchu told Sputnik.
"I am not sure if the weaponization was by design or by accident but what is crystal clear is currencies like Turkish lira — which has fallen 42.5 percent year to date are the equivalent of offering you an opportunity to pick up pennies in front of a freight train (the dollar)," Mr. Satchu told Sputnik.
"I have listened to so many folks rail against the dollar's hegemony and for eternity. Gaddafi and Saddam spring to mind and both ended up dead. It is not possible for Erdogan to bend the arc of monetary policy making to his will and if he continues down this path, the Turkish economy will continue to crater and we can see very clearly where cratering economies end like Venezuela and Argentina," Mr. Satchu told Sputnik.
"Erdogan is a mercurial politician but he reminds me of a man walking around a tinderbox with a match in his hand. He is endangering himself and his legacy is in peril," Mr. Satchu told Sputnik.
By weaponising the US dollar and considering trade tariffs, restrictions "national security" issues, Trump has jeopardised US Dollar's "safe haven" status and the dollar payment system. pic.twitter.com/rukIsLD8uH— Dan Popescu (@PopescuCo) 5 June 2018
He said Donald Trump may be universally unpopular but his foreign policy was a success for US interests.
'Trump's Aggressive Foreign Policy…Working A Treat'
"Trump's aggressive foreign economic policy is the signature success of this administration. It is highly effective — look at Venezuela to see its most extreme output. Iran is in a similar bind. China is in retreat notwithstanding some bravura talk. Trump can keep it up. It's working a treat," Mr. Satchu told Sputnik.
Mr. Satchu said the only politician who had managed to stave off a currency attack from the dollar was Malaysia's Mahathir Mohammed in 1998.
The dollar has been the world's dominant currency ever since the 1944 Bretton Woods agreement, when it replaced the gold standard, and Mr. Satchu said it would remain all-powerful for a long time.
The Bretton Woods system, created in 1944, saw the #dollar replacing #gold as the standard that many global currencies were pegged to. President #Nixon dissolved Bretton Woods in 1971 — the beginning of the modern system of floating #exchange rates.— FxPro (@FxProGlobal) 4 September 2018
"For the foreseeable future, I do not see gold, the (Chinese) RMB, or crypto replacing the dollar. It's not going to happen in our lifetimes," Mr. Satchu told Sputnik.
So who could be the next target for the US's ire?
South Africa, Beware!
Mr. Satchu said if politicians around the world are not wary of upsetting the US now then they are "asleep at the wheel".
I have asked Secretary of State @SecPompeo to closely study the South Africa land and farm seizures and expropriations and the large scale killing of farmers. “South African Government is now seizing land from white farmers.” @TuckerCarlson @FoxNews— Donald J. Trump (@realDonaldTrump) 23 August 2018
"South Africa strikes me as an example of a country that should be worried, very worried," said Mr. Satchu, hinting at Trump's recent tweets in which he has come out in support of white farmers who he claimed have had their farms seized and been subjected to "mass killings".
Ironically in 1986 the US Congress passed legislation proposing economic sanctions against apartheid-era South Africa, but it was vetoed by the Republican President Ronald Reagan. In the end Republican senators voted to override the veto and the sanctions helped bring the collapse of the apartheid regime.
The views and opiniones expressed in this article are solely those of the speaker and do not necessarily reflect Sputnik's position.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.