The Turkish government has made the dramatic move of repatriating all of its gold reserves that are currently housed in the US Federal Reserve in a move that President Erdogan says will pave the way for Turkey conducting bilateral international trade in gold rather than US Dollars. This comes shortly after Iran announced it will be switching from the Dollar to Euro as its official reporting currency.
Turkey which currently holds the world’s 11th largest gold reserves looks to break away from Dollar dependency in line with a general global trend to conduct trade either in a mixture of bilateral national currencies or in a neutral currency. The recent introduction of China’s Petroyuan looks to reshape global trade in the medium and long term as Shanghai’s exchanges ready themselves for China to overtake the US in terms of nominal GDP which based on historic trends and present realities will mean that by the middle of the 21st century, the Yuan will likely outpace the Dollar as the de-facto global reserve currency.
In times of international currency transition such as the one the world is currently experiencing, both currency baskets (an amalgamated value of multiple currencies) or metals become highly attractive as a means of stabilising trade and lessening one’s dependence on a single national exchange rates.
According to the Turkish President,
“Why do we make all loans in dollars? Let’s use another currency. I suggest that the loans should be made based on gold. With the dollar the world is always under exchange rate pressure. We should save states and nations from this exchange rate pressure. Gold has never been a tool of oppression throughout history”.
This announcement comes shortly after Donald Trump criticised Turkey’s judicial integrity over the arrest and trial of a US citizen based in Izmir who is accused of supporting the Fethullah Terror Organisation (FETO). Turkey’s dissatisfaction with its former US ally continues to grow, not only over the US openly siding with suspected terrorists in Turkey and America’s sheltering of the FETO leader Fethullah Gulen, but also due to the continued US support for radical Kurdish terrorist groups in northern Syria.
As Turkey continues to engage in more economic partnerships with Russia, China and African partners like Sudan, Ankara is clearly seeking to decease any economic dependence of US financial and monetary systems.
Furthermore, while Turkey still has some levels of agreement with the US in limited areas, Turkey is well aware that in spite of this, the US has already worked to undermine Turkish sovereignty. Ankara continues to blame US supported FETO agents for the failed coup of 2016. As Turkey and the US continue to be at odds over Washington’s support of PKK aligned groups in Syria, it remains within the realm of possibility that the same terrorist proxy chaos the US unleashed on Syria could one day be unleashed on Turkey, in spite of Turkey being in a much better position to defend itself than Syria was in 2011.
Turkey’s move to transition from the Dollar to gold further mirrors a move that Libyan revolutionary leader Muammar Gaddafi attempted before his assassination at the hands of pro-NATO Takfiri terrorists. But while Libya was abandoned even by its long time allies in 2011 and Syria found itself in a weak position at the beginning of the western, Gulfi and “Israeli” backed proxy war, Turkey continues to strengthen its military, post-coup civil service and its partnerships across the Middle East, Eurasia and beyond. Erdogan’s criticism of the Dollar and his apparent pivot to gold is yet another indication that Ankara is taking preemptive steps to avoid US engineered destabilisation of the country.