With the Lira at record lows amid its biggest single-day drop since Feb 2001’s crisis (when groups owning bank, media and holding companies jointly notoriously precipitated the domestic financial crisis by stashing away the home deposits in their offshore branches), Erdogan has made it clear that he is not backing down… for now.

First, Turkey has signaled no desite for an IMF bailout (having seen what happened to Argentina after theirs, who can blame him).

“We have received no indication from the Turkish authorities that they are contemplating a request for financial assistance,” IMF spokesperson Randa Elnagar said in an emailed statement.

And additionally, the Foreign Ministry said in statement.

“Turkey will give the necessary response to every step taken against it, as it has previously up to today,”

For now, at least, the Lira is not getting any worse…

The worst day since Feb 2001’s crisis…

Don’t forget though, as Erdogan said earlier in the day, “they have dollars, we have god.” Good luck buying a mocchachino with some ‘gods’…

“This is a textbook currency crisis that’s morphing into a debt and liquidity crisis due to policy mistakes,” said Win Thin, a strategist at Brown Brothers Harriman & Co. in New York.

“The way things are going, markets need to be prepared for a hard landing in the economy, corporate defaults on foreign currency debt, and possible bank failures.”

If Erdogan’s comments above are true – then he has 3 options: 1) Hike rates (he said he wouldn’t), 2) Enforce Capital Controls (he said he wouldn’t), and 3) Confiscate Gold/Dollars…. (he never said he wouldn’t)

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