Debt/GDP Math Refresher

One of the joys about writing about bond markets is that I always get questions in real life about whatever crisis du jour is being spread about bond markets. The thing to keep in mind: if you are a developed country with a freely-floating currency that you control, it takes a concentrated dose of stupidity to create crisis in your government bond market. Unfortunately, concentrated doses of stupidity are in great supply in the 2020s.

However, if we avoid stupidity, do we need to worry about debt levels? The answer is: one needs to worry about inflation created by fiscal and other policies (looking at you, tariff policy), but the debt-to-GDP ratio will take care of itself.

Coup In Venezuela

The White House sponsored a coup in Venezuela, with some loss of life. They captured President Maduro, leaving Vice President Delcy Rodriguez as the interim leader.

I have zero expertise in Venezuelan politics, but that might put me in the same boat as the brain trust in the White House that engineered the coup. I just want to comment on why it is unlikely to matter much for the oil market.

Canadian Economy: Muddling, But 2026 Looms

Courtesy of President Trump chickening out on breaking the USMCA/CUSMA free trade agreement on autos, the damage due to the tariff nuttiness from south of the border has been somewhat limited in Canada. The figure above shows the unemployment rate, which has finally rolled over.

UK MMT Wrangling

There’s been a rise of Modern Monetary Theory (MMT) wrangling on my Bluesky timeline, largely the result of intra-left mudslinging. I just want to stick my nose into the discussion, although I do not really spend much time thinking about U.K. policy options (I tend to either shake my head or snort in derision whenever U.K. economic debates surface). (The last piece of my EU5 series has been delayed.)

Grace Blakely recent wrote “On MMT” in which she discusses an argument with Richard Murphy. Meanwhile, a few of the anti-MMT conventional Labour economists started up their usual attacks on MMT.

EU5 And Economics Part II: Inflation And The Fall Of The Roman Empire

This article is a part of a series that resulted from some observations about the economic modelling in the strategy video game Europa Universalis 5 (EU5). That game allows you to take over the leadership of one of the very many political organisations that existed in 1337 and steer it into the following centuries (the game timeline ends in the 1800s). However, in order to understand the economic situation in 1837 in Western Europe, you need to understand how Western Europe evolved out of the Western Roman Empire. My previous article gave a potted history of how the Romans provided for their military, (an important topic in government finance).

If one is writing popular economic commentary and stray into Roman history, one needs to address the popular idea that inflation caused the collapse of the Roman Empire. Since my previous article had no mention of inflation, I obviously disagree. I will explain my disagreement in this article, finally returning to EU5 in the next article.

EU5 And Economics: Part I, Historical Backstory

The fifth installation of the video game Europa Universalis (hereafter EU5) just came out, and it had some interesting economic modelling issues. However, to get to explanation of how EU5 relates to the historical period (the start date of the game is 1337) I first need to go back to the historical background of what the situation was like in 1337 in the lands of the Roman Empire. (Although EU5 is global, I am really only familiar with European/Mediterranean history of that era. The game systems best fit “Western” regions, although the rest of the world gets filled in better as the developer adds content updates.)

This article is the first of a projected three-part series gives a very high level overview of the issues around the transition to and from monetary economies, and the issues faced by the Roman Empire. One reason is why this is interesting in the economic commentary context is that there is a fair amount of reductionist analysis of the period by hard money types as well as moralisers trying to draw lessons from the demise of the (Western) Roman Empire and the (so-called) Dark Ages.

Oh No, Missing CPI Data

It appears that the American October Consumer Price Index (CPI) will not be calculated by the Bureau of Labor [sic] Statistics (BLS), courtesy of the now-ended shutdown. Since the CPI calculations rely on an extremely large survey of data on a particular set of dates, the absence of employees making that survey makes it impossible to recover that data point.

Although this is not too big a deal, I just want to comment on some arcane side effects of this hole in the data.