"Government bond for sale: will accept any reasonable offer."

it is getting increasingly difficult to find automatic buyers of their bonds.

who will buy the debt? That wasn’t much of a problem during the 2010s. Governments were able to finance their deficits with ease; sometimes they were even able to issue bonds at negative yields, meaning that those who bought them were doomed to suffer a loss (in nominal terms, at least) if held till maturity.

The latest OECD report on government debt estimates that sovereign bond issuance by the group’s countries will be $17tn in 2025, up from $14tn in 2023. Some of that will, of course, be used to refinance existing debt, but the total amount of debt outstanding is expected to rise to $59tn, or about 84 per cent of the GDP of those countries.

central banks have stopped QE and are unwinding their holdings in programmes dubbed quantitative tightening. The more bonds central banks sell via QT, the more other investors have to buy, on top of new supply from governments.

The obvious answer might be to cut the deficit. But politicians face considerable problems when they try to do so. Many have promised to spend more on defence. Cutting spending or pushing up taxes risks alienating electorates, which seem increasingly willing to vote for populist, or nativist, parties

We're all fucked, basically

In the short term, the basic arithmetic of bond markets has deteriorated; more supply coupled with a reduction in both reliable and speculative demand. And that means higher bond yields look probable, forcing governments to pay more to fund their ever-growing deficits. The maths of governing developed countries looks likely to get increasingly difficult.