Kibkom North Cyprus Forum

Just checked on Bigpara and it was 5.99 - what are we gonna do?

We are going to wait for all the shops and restaurants to put their prices down to compensate lol.

Panic over its 6.02 on Xe

GBP v TLR has found value around here because markets are waiting to see what Erdogan does next.

He stepped back just before the election and the central bank took action which calmed the situation.

If he now takes over monetary policy as he threatened it will kick off again - if he allows the more sensible players to get on with their jobs the lira will strengthen.

Hedge-fund wrote:GBP v TLR has found value around here because markets are waiting to see what Erdogan does next.

He stepped back just before the election and the central bank took action which calmed the situation.

If he now takes over monetary policy as he threatened it will kick off again - if he allows the more sensible players to get on with their jobs the lira will strengthen.

Do you think he is pumping the gold reserves in to stabilise the lire?
If he is they'll be running out any day now

5.98 at Garanti bank today

Markets like stability Erdogan has promised economic reforms he knows the country is struggling so maybe he might do something to cause the lira to strengthen mid to long term

Talk by a banker this morning said he would not be surprised if it went to 7 before it drops back. He advised leaving interest in the deposit accounts and using sterling pensions to live on taking advantage of the high pound. ?

Hopefully it has peaked and will go down ... oh for the days of 2.2tl to the £

David wrote:Hopefully it has peaked and will go down ... oh for the days of 2.2tl to the £

Could I ask what particular financial circumstances prompt you to view a lower TL to GBP rate favourably?

That is, in what way would a lower rate be of any benefit to you - or to the rest of us?

Quite easily Keith, people that put their savings into Tl to get a higher interest and now want to go back to the UK and if they changed up their cash it would probably be halved so any lowering of the TL to the pound would enable them to claw some back.

David wrote:Quite easily Keith, people that put their savings into Tl to get a higher interest and now want to go back to the UK and if they changed up their cash it would probably be halved so any lowering of the TL to the pound would enable them to claw some back.

So, a very tiny proportion of the expat community would benefit at the expense of those who are here for the long term...

Can I take it that you are actually one of those who would benefit?

Yes you can

The wish is father to the thought.

"So, a very tiny proportion of the expat community would benefit at the expense of those who are here for the long term...
Can I take it that you are actually one of those who would benefit?"

That's your answer then Keith and the solution as well. Let the rate go to 7TL to the £ and then drop to around 5TL, then the majority would benefit - even the local population once it stabilised and wages were forced up to meet prices as will always happen long term. The minority can console themselves with the knowledge that there is still no such thing as a free lunch.

David / Keith,

£100,000 exchanged into TL in June 2008 at 2.45TL to the £ = 245000TL

245,000 TL invested over 10 years at a rate net of tax @ 9.5% with compound interest yields a total of 605,000TL.

605,000TL exchanged to £ in June 2018 at an exchange rate of 6.05 TL to the £ = £100,000

End result no one has lost and no has gained.....FACT.

There are lies, damned lies and statistics!

I dug out my old work not believing your maths hp12c not used it for 11 years and I made it £100,357.97 so your point is well made

And if the rate falls to 5TL to the pound then 605000 becomes £121000.

Siverfox1
£ 100.000 invested in the UK through a investment company over Ten years should result in the £100K becoming circa £200K , Although due to the financial fallout about 2008 I would say £180K is nearer the actual return.

silverfox1, I just love stats but nobody ever believes them if you tell them. I think the major problem is that once you have eaten your cake then there is no more to eat - fact! So although the figures speak for themselves I fear that the minority wanted to live off the interest (eating the cake) whilst the cake was actually reducing all the time - no free lunch! For those of us who have not a lot it is of little interest (no pun intended) as we can't lose what we don't have in the first place BUT right now we can live like all the rich because we get more for the £ - it's like a paid holiday (or free lunch) - lol.

So if you have eaten plenty of cake over the last 10 years you have lived like a king and you still have about 50% of your cake left.

And remember if the rate goes down the cake gets bigger and if the interest rate goes up then you will eat even more cake in the future!

I just love cake!

Some people however are never satisfied...they just want more and more cake don't they, until they are sick!

It's only since the rate went up that we can afford cake - lol. Eating it whilst the going is good, no point in saving it for later it will only be stale and then the damn dog will eat it!

You are so right waddo. My lot sit at my feet waiting for crumbs to drop (dry, stale or even mouldy, they are not fussy) to them cake is cake. !!!

And the CT newspaper is now 10tl.

Oh no!

silverfox1 wrote:David / Keith,

£100,000 exchanged into TL in June 2008 at 2.45TL to the £ = 245000TL

245,000 TL invested over 10 years at a rate net of tax @ 9.5% with compound interest yields a total of 605,000TL.

605,000TL exchanged to £ in June 2018 at an exchange rate of 6.05 TL to the £ = £100,000

End result no one has lost and no has gained.....FACT.

There are lies, damned lies and statistics!

I’m not seeing that.
The lire rate in July 2013 was 2.9 I believe.
If you had changed up £100,000
you would have got TL 290,000
If you would have got 12.5% interest even without tax it would be worth TL 522,588 today.
At 6 lire you’re original £100,000 is now worth £87,000.
That’s just on the rate, Turkish inflation over the last 5 years has averaged over 9% a year.

Oh Silverfox creative accounting does not do you justice ... on your analogy you would have course lost 360.000 tl in interest in the period that you have used as an example.

10 years accounting on 9,5% works out as silverfox said..
A 5 or 3 year accounting becomes difficult, even at 12,5% and any "after 2016" accounting certainly is loss making.

you should have bought TL in september 2015 for 4,70 and should have sold in october 2016 for 3,75.
but that was only working for GBP, not for euro and USdollar.

some want a GBP-TL exchange of , say 5, again?
ok, but what will be the exchange rate GBP to the, eg, Euro? 0,85?

what about prices which have been put from, say 5 to 10 lira? do they come down again?
i never have seen prices going down except for products with a " two weeks to go expire date"... and for alcoholics.
but that had nothing (or little) to do with the exchange rate... it was the lower taxing, due to the lower prices in the RoC.

pls also do not forget that many TR manufacturers would like to rise their prices, but cannot, for several reasons. the result is that they are running even deeper into debts.. (also affected.. eg, KIBTEK) which drops the lira even more.. a deadly circle. one day you would like to buy a "cheap bottle of EFES beer" for now 4 lira, but unfortunately its not in the shelf an more... (or you wonder when this electricity cut will end...)

Thanks kibsolar, at last a business man who can count.

Anyway ..... everything is easy in hindsight so maybe I should have baked a fruitcake instead of a Victoria sponge!

Should buy Tl now and sell when it gets to 4 or below

David wrote:Should buy Tl now and sell when it gets to 4 or below

...and when Erdogan starts meddling and interfering with the operation of the Central Bank and insisting that they lower interest rates - as he has said that he will - and the rate goes to 10TL per GBP, where will that get you?

With only minor fluctuations, the TL has remorselessly fallen in value against the Pound, year on year.

Take your loss, get out, and resolve never to put all of your eggs in one basket, ever again!

Each time I go to a funeral, interest rates and the rate of exchange seem to be distractions not worth worrying about. Life is beautiful, health is a precious gift. Enjoy them both while you have them.

silverfox1 wrote:David / Keith,

£100,000 exchanged into TL in June 2008 at 2.45TL to the £ = 245000TL

245,000 TL invested over 10 years at a rate net of tax @ 9.5% with compound interest yields a total of 605,000TL.

605,000TL exchanged to £ in June 2018 at an exchange rate of 6.05 TL to the £ = £100,000

End result no one has lost and no has gained.....FACT.

There are lies, damned lies and statistics!

You have ignored inflation.

The £100k you mention would now have the buying power of £40k

Hedge-fund wrote:
You have ignored inflation.

The £100k you mention would now have the buying power of £40k

Nearer £ 77k I would say, if using the UK inflation rate over last 10 years, which if you are talking about sterling is the only rate that makes sense in such a calculation.

Source, using figures from 2008 to 2018 http://www.in2013dollars.com/2008-GBP-i ... ount=77000

Still only out by a factor of just shy of 100%.

Or to put it another way the amount of 'stuff' (including cat food) you could by with £100k in 2008 would cost you today around £130k to buy the same amount of 'stuff' (including cat food).

erol wrote:
Nearer £ 77k I would say, if using the UK inflation rate over last 10 years, which if you are talking about sterling is the only rate that makes sense in such a calculation.

Surely we are talking about Sterling deposited in TRNC?
We are talking about interest rates on deposits of 9% plus which hasn’t been seen in the UK since I had a fringe.
Also the crux of the conversation is the lire rate to sterling which is only of real interest if you have money out here?
So I think the Turkish or TRNC inflation rate is the relevant one.

EnjoyingTheSun wrote:...So I think the Turkish or TRNC inflation rate is the relevant one.

Well... perhaps not, if you're wanting to convert the TL back to GBP and take it back with you to spend it in the UK - which is what David was talking about.

Remember David?

"...people that put their savings into Tl to get a higher interest and now want to go back to the UK and if they changed up their cash it would probably be halved so any lowering of the TL to the pound would enable them to claw some back"

Keithcaley wrote:

EnjoyingTheSun wrote:...So I think the Turkish or TRNC inflation rate is the relevant one.

Well... perhaps not, if you're wanting to convert the TL back to GBP and take it back with you to spend it in the UK - which is what David was talking about.

Remember David?

"...people that put their savings into Tl to get a higher interest and now want to go back to the UK and if they changed up their cash it would probably be halved so any lowering of the TL to the pound would enable them to claw some back"

I would imagine the vast majority of people who put their money into lire at the high interest rates did so with the view to trying to live off the interest in which case the inflation rate in the TRNC is the relevant one.
The 290,000 TL they got in 2013 would have been heavily hit by TRNC inflation as would the interest accrued off it and spent.
Also I’ve never believed the inflation figures quoted in the UK. Electricity, gas, petrol, train fares etc etc goes up far more than the quoted inflation rate. Even if you have several cats electricity etc has far more effect on the money in your pocket.

EnjoyingTheSun wrote:

erol wrote:
Nearer £ 77k I would say, if using the UK inflation rate over last 10 years, which if you are talking about sterling is the only rate that makes sense in such a calculation.

Surely we are talking about Sterling deposited in TRNC?
We are talking about interest rates on deposits of 9% plus which hasn’t been seen in the UK since I had a fringe.
Also the crux of the conversation is the lire rate to sterling which is only of real interest if you have money out here?
So I think the Turkish or TRNC inflation rate is the relevant one.

Hedge-fund's point as I understood it, was that how much stuff £100k would buy you in 2008 is more than how much stuff the same sterling amount will buy you today in 2018. This I think is correct. Where I disagree with hedge-fund, is the degree of how much less. They suggested that £100k today would buy you 60% less stuff than it did in 2008. I think 30% less is a more accurate figure.

I think it is still the more accurate figure even if you 'convert to TL'. I do not think how much 'house', or 'car', or 'cat food' or 'electricity' or anything else you could buy in the TRNC, paying in TL converted from you £100k was 60% more in 2008 than it is today, for each pound converted. I think the figure is closer to 30%. That is how much less stuff a given pound today buys you, in pounds or converted, than it would have bought you in 2008.

Basically sterling has devalued because of inflation around 30% in the last 10 years and not 60% as hedge-fund suggested (as far as I understood them). That the TL has devalued more than this due to inflation is counteracted by it having also devalued relative to Sterling in currency exchange terms.

EnjoyingTheSun wrote: Also I’ve never believed the inflation figures quoted in the UK. Electricity, gas, petrol, train fares etc etc goes up far more than the quoted inflation rate. Even if you have several cats electricity etc has far more effect on the money in your pocket.

So you think Hedge-fund's figure of a pound buys you 60% less stuff today than it did in 2008 is correct ? You think say a ford focus costs in sterling 60% more today that it did in 2008 ? I still think 30% is a more realistic figure myself. My sterling income has not increased really in the last 10 years and whilst it does feel I am getting less stuff (here) from that income it certainly does not feel like I am getting 60% less. Be it electricity, car, house, bread or cat food.

I really think that we should be talking Mars Bars here!

According to the BoE the value of £ 100,000 in 2008 is now worth 126,843.66.

Msg 35 ... yes Keith i remember.

erol wrote:

EnjoyingTheSun wrote: Also I’ve never believed the inflation figures quoted in the UK. Electricity, gas, petrol, train fares etc etc goes up far more than the quoted inflation rate. Even if you have several cats electricity etc has far more effect on the money in your pocket.

So you think Hedge-fund's figure of a pound buys you 60% less stuff today than it did in 2008 is correct ? You think say a ford focus costs in sterling 60% more today that it did in 2008 ? I still think 30% is a more realistic figure myself. My sterling income has not increased really in the last 10 years and whilst it does feel I am getting less stuff (here) from that income it certainly does not feel like I am getting 60% less. Be it electricity, car, house, bread or cat food.

If we are talking Turkey/TRNC then 30% is certainly too low if this is accurate and I have no reason to doubt it is

http://www.inflation.eu/inflation-rates ... urkey.aspx

erol wrote:

EnjoyingTheSun wrote: Also I’ve never believed the inflation figures quoted in the UK. Electricity, gas, petrol, train fares etc etc goes up far more than the quoted inflation rate. Even if you have several cats electricity etc has far more effect on the money in your pocket.

So you think Hedge-fund's figure of a pound buys you 60% less stuff today than it did in 2008 is correct ? You think say a ford focus costs in sterling 60% more today that it did in 2008 ? I still think 30% is a more realistic figure myself. My sterling income has not increased really in the last 10 years and whilst it does feel I am getting less stuff (here) from that income it certainly does not feel like I am getting 60% less. Be it electricity, car, house, bread or cat food.

But if you are getting an income on sterling you will now be getting a lot more lire for that sterling which will take a lot of the edge off of the inflation. My thoughts are with those who changed up all their savings into lire and relied on the high interest on sterling. That sterling is locked in at 2.9 if changed back in 2013.

EnjoyingTheSun wrote:If we are talking Turkey/TRNC then 30% is certainly too low if this is accurate and I have no reason to doubt it is

http://www.inflation.eu/inflation-rates ... urkey.aspx

Well I am talking about how much less stuff my pound sterling buys me in 2018 than it did in 2008. Or if you prefer how much less stuff my 6TL buys me today (one pounds worth of TL in 2018) than my 2.45 TL (one pounds worth of TL in 2008) buys me. The idea that 6TL today buys me 60% less than 2.45TL bought me in 2008 just does not see right to me ? Does it seem right to you ?

erol wrote:

EnjoyingTheSun wrote:If we are talking Turkey/TRNC then 30% is certainly too low if this is accurate and I have no reason to doubt it is

http://www.inflation.eu/inflation-rates ... urkey.aspx

Well I am talking about how much less stuff my pound sterling buys me in 2018 than it did in 2008. Or if you prefer how much less stuff my 6TL buys me today (one pounds worth of TL in 2018) than my 2.45 TL (one pounds worth of TL in 2008) buys me. The idea that 6TL today buys me 60% less than 2.45TL bought me in 2008 just does not see right to me ? Does it seem right to you ?

Erol inflation is a figure on its own the exchange rate change is a different matter. The question is if 2.45 or let’s say 245,000 buys you the same now as it did in 2008. People who sank their money into lire in 2008 can’t say I’ve changed my mind can I have 6 to the £ now

EnjoyingTheSun wrote:

erol wrote:
Nearer £ 77k I would say, if using the UK inflation rate over last 10 years, which if you are talking about sterling is the only rate that makes sense in such a calculation.

Surely we are talking about Sterling deposited in TRNC?
We are talking about interest rates on deposits of 9% plus which hasn’t been seen in the UK since I had a fringe.
Also the crux of the conversation is the lire rate to sterling which is only of real interest if you have money out here?
So I think the Turkish or TRNC inflation rate is the relevant one.

Indeed.

The inflation calculation was based on Turkish rates.

Hedge-fund wrote:

EnjoyingTheSun wrote:

erol wrote:
Nearer £ 77k I would say, if using the UK inflation rate over last 10 years, which if you are talking about sterling is the only rate that makes sense in such a calculation.

Surely we are talking about Sterling deposited in TRNC?
We are talking about interest rates on deposits of 9% plus which hasn’t been seen in the UK since I had a fringe.
Also the crux of the conversation is the lire rate to sterling which is only of real interest if you have money out here?
So I think the Turkish or TRNC inflation rate is the relevant one.

Indeed.

The inflation calculation was based on Turkish rates.

But that makes no sense what so ever as far as I can see. As far as I can understand what you are saying you seem to be telling me £100k has devalued by 30% over 10 years if I am in the UK but by 60% if I am in the TRNC. That just seems to be patent nonsense to me. By this argument if I was Zimbabwe for the last 10 years and put 100k STERLING under my bed ten years ago, today it would be worth £1 or less. Sorry but just seems like patent nonsense to me.

If you want to use the Turkish inflation rate to determine how much less 'stuff' 100K sterling buys you to today vs 10 years ago then the only sensible way to do so as far as I can see would be to calculate how much less stuff 605,000TL will buy today vs how much stuff 245,000 TL bought you in 2008.

EnjoyingTheSun wrote:Erol inflation is a figure on its own the exchange rate change is a different matter. The question is if 2.45 or let’s say 245,000 buys you the same now as it did in 2008. People who sank their money into lire in 2008 can’t say I’ve changed my mind can I have 6 to the £ now

Did you see silverfox1's post ?

according to their post If you changed £100k in to TL in June 2008, and got average annual compound interest of 9.5% and then today changed that TL amount plus the TL interest it has accumulated back to sterling you would get back £100. His whole point was people who sank sterling in to TL 10 years ago and did not spend the interest gained on it as TL deposit but let that accrue can indeed 'change their mind'. If they do change their mind they get back the £100k they started with. Like they had just stuffed it under their mattress 10 years ago.

Hedge-fund then says, but that £100k , in terms of how much 'stuff' it could be exchanged for, has decreased, over the 10 years. Which I agree with. But I do not agree that it has decreased by 60%, that today you can exchange it for 60% less stuff than you could in 2008. I thin this is patently not correct. That £100k that 10 years ago I put into tl and then changed back today, or stuff under my mattress, will buy about 25-30% less stuff today than it did in 2008.

erol wrote:

EnjoyingTheSun wrote:Erol inflation is a figure on its own the exchange rate change is a different matter. The question is if 2.45 or let’s say 245,000 buys you the same now as it did in 2008. People who sank their money into lire in 2008 can’t say I’ve changed my mind can I have 6 to the £ now

Did you see silverfox1's post ?

according to their post If you changed £100k in to TL in June 2008, and got average annual compound interest of 9.5% and then today changed that TL amount plus the TL interest it has accumulated back to sterling you would get back £100. His whole point was people who sank sterling in to TL 10 years ago and did not spend the interest gained on it as TL deposit but let that accrue can indeed 'change their mind'. If they do change their mind they get back the £100k they started with. Like they had just stuffed it under their mattress 10 years ago.

Hedge-fund then says, but that £100k , in terms of how much 'stuff' it could be exchanged for, has decreased, over the 10 years. Which I agree with. But I do not agree that it has decreased by 60%, that today you can exchange it for 60% less stuff than you could in 2008. I thin this is patently not correct. That £100k that 10 years ago I put into tl and then changed back today, or stuff under my mattress, will buy about 25-30% less stuff today than it did in 2008.

Erol can read exactly what I wrote and is 99.99% right.

The .01% where he IS WRONG is that he has quoted above that 'they' would get back £100!!!!!! Well no one has worked out an inflation figure that large yet!!!

for june 2008 to june 2018, i found following datas
UK
inflation: 1 GPB should be today 1,248GBP (= 24,8% for 10 years)
living cost index today is 1,355... !
because of rents, cat food and Mars bars (did you know that "Mars" is one of the biggest pet food producer?)
Euro
inflation 1 - 1,134
living cost index 1- 1,213
TL
inflation 1- 2,30 (last 5 years = 1,59, last 3 years 1,26)
living cost index . not found yet.. maybe someone else? but i would approx 10% higher as inflation?
if so, then that what you could get for 1 lira in 2008, would cost today, say, 3 lira.
how much was a CT in 2008?

again, pls note that many turkish (not "international") products are "kept low in TL price", it was (and is) "politically wanted".
now we had an election.. prices may go up soon.
eg, a bottle of Efes was always "above one euro", say approx 1,1. now it is 75 eurocents.
soon... shops will have to change shelf prices weekly? without stuff, which does not want to work for 450 euros (decreasing every day..) a month, formerly 600 and more?

clear is, the higher the interests given, the higher the risk. that applied eg, for people having invested euro (say 1,-1,5% interest rates ) to GBP (say 3 - 4%) to get "more out". after june 2016 100.000 euros was worth 80.000 GBP only, so, "many years of advantage" lost.
same applies for currencies-interest rates deals with the TL.... it was and is... risky..

especially after the financial crunch started in 2008 (and we are still in.. it seems we are heading for the next one.. ) you can not expect any "safe" investments higher as the inflation rate.
reason: there is plenty of money around.. money is cheap. the fed, the ecb, the boe.. they all flood(ed) the market with money.
the times of getting 8% on GBP with eg, between 1995 and 2005, inflation of 1,5% a year and make a living from 150 - 200 k possible (especially in the TRNC..) are over.
that situation made many UK expats leave... plus the case with private health insurances and the devaluation of the GBP. formerly 1k a month for living.... now 350 and this goes for the insurance.

what can i say? a good (to assure that you will see the roi.. and after the roi you start to earn..) solar energy system pays you (approx.. what can i say now?) 15%.
the lesser e-bill will not make a living, but it helps.