Turkey and Russia in the grip of price trap

- The coins of Argentina, Russia, Turkey and Venezuela are under heavy pressure this summer. In addition to domestic problems, these countries also suffer from the trend that investors move their capital to the United States because interest has risen there.

According to wealth strategist Richard Abma of OHV, President Donald Trump reinforced this development by encouraging US companies and consumers with tax-friendly measures to take their dollars from abroad back to the US. 'That is currently at the expense of emerging countries,' Abma explains.

The Turkish lira lost almost 40% this year against the dollar. Abma expects the economic crisis in Turkey this weekend will be discussed at the meeting of central bankers in the American storehouse Jackson Hole. 'No one benefits from the fact that Turkey remains a problem', emphasizes the asset manager.

An interest rate increase by the Turkish central bank could improve the situation. Abma thinks it will also help if President Trump gets more friendly towards the Turks. 'I do not rule out that it is happening, because Trump can suddenly turn around and take a more friendly tone. That is what we have seen with him in North Korea, 'said the strategist.

In addition to the Turkish lira, the Russian ruble is currently also heavy. The Russian currency fell against the dollar this week to the lowest point since the beginning of 2016. To stabilize the ruble, the Russian central bank will no longer sell rubles until the end of September.

Argentina is also making every effort to stop the fall of the peso. The Argentine currency is at the lowest point in history against the dollar this month. To halt the fall of the peso, the Argentines have increased interest rates to 45%.

In Venezuela the situation is much worse. The country devalued its own currency by 96% last week. At the same time, the minimum wage in Venezuela has been increased by more than 3000%. Venezuelan employees have little to do with it, as annual inflation could go up to 1 000. 000% this year according to IMF.