Every country’s debt, mapped


I like this.


An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

By Matthew Yglesias, Vox

Unless you are dead inside, you love government debt data visualizations and this one from HowMuch.net is an excellent one, showing each country scaled to its debt-to-GDP ratio:









The basic idea of this ratio is that a bigger, richer country can probably afford to borrow more money than a smaller, poorer one. So rather than saying Jamaica is in good shape because it has such little debt but Brazil is a disaster, we see that Jamaica actually has a lot of debt relative to the size of its small economy, while Brazil has been quite frugal given its overall size and prosperity.

But to quibble for a moment, HowMuch.net characterizes this ratio as measuring the “unsustainability” of government debt levels.

That’s wrong, I think.

Some of these countries — the United States, Japan, the UK — owe money that is denominated in their own currency. The Japanese state isn’t going to run out of yen no matter what happens, and given Japanese inflation trends over the past 20 years that country not going to find it problematic to print a bunch of yen if that’s what needs to be done.

A country with a lot of foreign currency debts (looking at you again, Jamaica) has a much more tenuous position that is much more analogous to a heavily indebted family or business.

Then there’s the middle-ground case of the eurozone countries. Greece, Italy, Portugal, etc. don’t issue their own currency, but they also don’t borrow money in someone else‘s currency. The eurozone could, collectively, manage these debts fairly easily. But thus far it hasn’t wanted to, which makes eurozone debt riskier than it needs to be.



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