What caught my eye

1. Japan's debt is on an explosive path, unless they have hyperinflation. That is not a literal quote from the article, just my takeaway from Ben McLannahan's piece on the FT.

No new ideas here: government debt keeps climbing, and it's not clear at all how they will stabilize it. But the quotes from some government, BoJ officials, and market participants, as well as some sentences in the article, were striking.

“A market crash is inevitable,” he says. “The only question is what measures we can take today to lessen the damage.”

"...gross central government borrowings equivalent to 24 years of tax receipts..."

"As Takehiro Sato, a policy board member, puts it, the more government debt a central bank buys, the greater the appearance of 'fiscal dominance' – where monetary policy essentially becomes a ruse to keep the state solvent.

The boundaries are already blurred. Dealers talk about 'the BoJ trade' – buying bonds at auction from the finance ministry then flipping them immediately to the central bank to bag a few basis points of profit. One issue of 30-year bonds on February 6 was almost 90 per cent owned by the BoJ a month later. 'We are buying tonnes of JGBs; we are monopolising the market,' says Mr Sato."

"Claims of fiscal discipline are a 'charade', says Mr Bass. 'If you really look into next year’s revenues and expenditures, they’re spending Y23.3tn on debt service and Y31tn on social security, and getting Y50tn in tax. Before they even run the government they’ve already spent the money.'"

2. Big steelmaker in China stops production, awaits debt 'restructuring', at Caixin. This is the third default in China I hear about over the past couple of months: two in the steel sector, one in the solar panel sector. Who knows how many more are there. Plus, shadow bank lending apparently on the decline.

3. Life without Visa and Mastercard. The Russians say "no problem."

4. Uncertainty traps: intriguing paper. Ungated, early version (pdf).

5. This is an old piece (1993), by Mark Knutson, but I must admit I never read this account of Charles Ponzi's "remarkable criminal financial career." (pdf)

6. The 100th year anniversary of the Great War is approaching fast. I'm watching this 26-episode documentary by the BBC. So far I'm liking it. Speaking about BBC documentaries from the 1960s, earlier this year I enjoyed Kenneth Clark's Civilisation, an account of Western civilization through art, from the 6th century through modern times.