Sunday, January 26, 2014

Turkey, Bailouts and the Great Energy Game

Turkey is an interesting place. For a lover of history, it is the home of the great Byzantine Empire that lasted for a thousand years, overrun by the Turks. Forget the final fall of Constantinople, if only Basil the Bulgar Slayer had a son as a competent successor and the Byzantines had won at Manzikert you might be able to travel to the Eastern Mediterranean without fear of starring in Taken 3. Turkey has always been a land of intrigue and more is brewing now. Turkey's financial situation is dicey, and this comes months after mass protests against corruption within the regime. Another ball is rolling into play for the D.C.-Brussels axis and Russia-China axis to fight over. Turkey will need help, so who will do the helping and what will be the costs to Turkey's leadership.

Who runs Turkey? For decades after Ataturk, the military held real power. With the Cold War, the Turkish military was a great client for the Red Empire (Pentagon/US MI Complex) as a border state in the Commie-West divide. Geographically, it was key as the Dardaneles were strategically important as was Turkey's location at the belly of western Russia. JFK bargained away missiles in Turkey after the Cuban Missile Crisis, which was a huge win for the Soviets. With the Cold War over, Turkey's relationship with the US and role in the Middle East has changed. Erdogan's electoral victory was followed up by a military purge, of both men and mind (see: Ergenekon Trials), and the US has not made a peep to protect their old MI complex clients.

The purge of secular officials and military bras was pushed by the Muslimist wolf in moderate sheep's clothing Erodgan and his AKP party, but now fighting seems to be within the Muslimist ranks. Steve Sailer has been steadily noting the Gulen movement's use of test centers to place men in military and police. At the core of the Gulen movement, a shadowy religious thinker, Mr. Gulen, is the prime mover. As Sailer writes, Gulen also lives in the Poconos. Gulen is aware that the military is the key, as he who controls the guns can maintain control.

How does Gulen figure into bailing out Turkey? For over twenty years, Gulen has been linked with Erdogan, but a division is growing. The NY Times has taken notice. Gulen is a Sufi mystical thinker with universalist views. Look at his views on contemporary issues. He supports education, interreligious  + intercultural dialogue, critical of secularism but says Islam is compatible with government, pro-Turkey into the EU, anti-Muslim terrorism, anti-Gaza Flotilla, and even sees roles for women. Seems like a US State Department's wet dream for a moderate Muslim leader. Gulen would make a tremendous figure and spiritual leader to return to Turkey as part of the new leadership clique.

That is possibly at stake with a bailout of Turkey. The debts Turkey has incurred are held en masse by European banks, with Turkish debt making up 5% of Greek bank holdings. Turkey's bid for EU membership has stalled, which is due to the storm raging through Europe currently and, ahem, Turkey's poor record on human rights and slide away from democracy. Turkey needs a bailout but will it be US/EU funded or Russia/China funded? A recent problem is emerging market currencies depreciating so any sudden plunge could screw Turkey quickly. The FED and ECB are printing so many billions that this will not be difficult to cover, but the political ramifications at home might be a problem. Bailing out who? European banks perform bail-ins to cover losses? Looking at the electoral calendar might help gauge Western willingness to bid high.

Who bids higher to save them? If the US/EU wants to bid highest, this could come after a true crisis hits Turkey and they desperately need the cash. Needing cash might also mean regime change, which is where Gulen comes in. If you doubt this, ask South Korea how a financial crisis can change politics in weeks. Gulen himself need to take over, much like Ayatollah Khomeini, Gulen could create a position holding the true power, while leaving the current government structure in place for a more friendly looking, Western trained president as a face. The question becomes how much does State-CIA believe they can work with Gulen and use him to achieve what they want.

There is another problem, and this is where Syria and Ukraine come into play. Because Russia/China/Iran have seen their will be done by Assad remaining in power and the Ukraine turning to Russia, the last gas pipeline into eastern Europe not controlled by Russia or a Russian client is the Nabucco pipeline. The entire project was to run through Turkey linked to Caspian fields all the way to central Europe. The USG retreat forces the US/EU hand now, look at the extra pressure being applied to Ukraine and whispers of splitting the nation in two. The USG is scratching for half a loaf. Despite being covered at Zero Hedge months ago, Western media is now discussing the Turkey-Iran "oil for gold" scam, which is at the heart of the new corruption scandals. The article mentions calls for Erdogan to step down. If Erdogan sees that his position and his network of Muslim cronies is threatened by a US/EU bailout, Russia/China would make sense for him. If he doesn't feel threatened, then he can make the US/EU deal. If I were Erdogan, I would be worried.

This is a big ball, and it has knock on effects. The Middle East status quo benefits Russia and China, while change benefits the West. If the Russians did bailout the Turks, there are secondary effects. If Russia is in control of natural gas transmission to Europe, how fast does Qatar, which pushed the West to remove Assad for a pipeline through Syria, start talking to Russia about a pipeline from Qatar to Iran across the Gulf? Does Qatar alter the investment balance in their sovereign wealth fund? What happens with Cyrpus' gas fields? Does Turkey just overrun the other side of Cyprus? All secondary effects because what comes first is bailout or no bailout and who is in power? Erdogan and his clique have a Neo-Ottoman view of Turkey with broader ambitions. Those ambitions just might be realized by another friendly looking, moderate Muslim Turk and his band of cronies.

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