The Associated Press reports that Turkey has begun to shell positions held by Syrian Kurds close to its border, the first stage of a cross-border offensive against the Kurds. The trouble is that Syria’s Kurds are allies of the United States, which plans to arm and train a 30,000-man militia over Turkey’s vehement protests.
“Erdogan’s strategic embarrassment” is the top headline in Germany’s leading center-right daily Die Welt. Writes Michael Stuermer, “Erdogan is in a pickel. If he does nothing in northern Syria, he’ll be in trouble in domestic politics; if he lets the tanks fire, he’ll be in a foreign policy situation that could run out of his control.”
The Syrian Kurds were boots on the ground that kicked ISIS out of northern Syria, de facto allied to the Assad government, which also fought ISIS, but they are also a threat to the Syrian government, which fears a Kurdish independence movement allied to the Kurds of northern Iraq. The US is arming and training the Kurds as a bulwark against ISIS, but also as an obstacle to Iran’s ambitions in Syria; Iran’s Kurds would also like to break away and someday reunite with Kurds in Iraq, Syria and Turkey.
The situation resembles the final scene of Quentin Tarantino’s “Reservoir Dogs,” in which each member of a gang points his pistol at another member of the gang, and, inevitably, everyone gets shot.
Bottom line: Sell the Turkish lira and get out of Turkish stocks.
Fed tightening+high oil prices had usually been bad news for Ankara. So "the bottom line" has made sense in the past, at least for TRY. With a caveat though. China’s BRI money is pouring into Turkey. To get an idea of the scales, global base money is increasing thanks to PBoC despite Fed B/S contracting, and ECB in a tightening mood. MSCI Turkey in dollars is virtually flat since 2013 as withdrawing western liquidity offset by increasing support from Beijing. $26 bn will be poured into the Turkish infrastructures of the BRI
Turkey will attack the Kurds. The US will not and cannot support the Kurds openly but will do so covertly but eventually the Kurds will be decimated at least their organize resistance. The Kurds will resort to terrorism and the middle east will be bact to square one just like what the US wants it to be,