Author Archives: theusernamewhichismine

Faulkner is disappointing in Pokémon HeartGold

I’m playing through Pokémon HeartGold and I have to say I’m kind of disappointed with Gym Leader Faulkner. 

So I played Pokémon Gold on a gameboy color back in the 90s, and I remember thinking Faulkner was a kind of clever gym leader.  He used flying type Pokémon, which are weak against both rock-types and electric-types.  Funnily enough Pokémon of those types are available within a short walk of his gym, so it seems like he should be easy to beat, right?  Just catch a rock-type (geodude) or electric-type (mareep) Pokémon and you can waltz in and beat him.  But Faulkner had a trick up his sleeve, his Pokémon knew mud-slap, a ground-type move that was super effective against both rock-type and electric-type Pokémon.  So you’d walk in with a geodude and a mareep and he’d completely demolish you.  In-universe I’m sure a lot of 10-year-olds ran out of his gym crying.

It was cool to me because it makes sense why he would have that move.  He wants to win but has to use flying-types which are weak to rock and electric moves.  So he devises a way to turn the tables on anyone using those types against him.  But apparently the move mud-slap wasn’t actually any good, because in HeartGold he no longer uses it.  Now you *can* beat Faulkner easily with a nearby mareep or geodude, and it just makes him seem less clever to me, even if the move that replaced mud-slap is probably a better move overall.

Capitalism 2: A game that makes you appreciate loans

I’ve played a lot of video games in my time, and let me tell you Capitalism 2 is a doozy.  You can get it on the Steam store for about 10 dollars and that’s about what it’s worth because it’s decades old and the UI is painful.  Still, I’ve played a lot of it and it does help you appreciate some nifty real-world concepts.

For those of you who have never played it (ie everyone), Capitalism 2 is a game in which you take control of a large corporation with nothing more than a few million dollars and a dream of riches.  You then use that money to try to turn a profit by manufacturing and selling one or more of the games 50 or so unique goods.  There’s food items, furniture, electronics, cars, and they all have their own production chains and sales strategies for you to manage.  Food items are all about quality and price so you just need to invest a lot into your farms and try to outcompete your competitors.  Designer clothes are all about branding, so you need to spend millions of dollars on advertising to gain market share.  While electronics require investment into R&D before you can even begin to try making them.  It’s kind of fun to throw down with a few AI companies and compete to turn $1 million into $1 billion, but if the game has taught me one thing it’s that loans are overpowered.

A loan, both in game and in real life, is a way to get money now in exchange for money later.  While the total amount you’d have to pay back is greater than the face value of the money you get loaned to you, you can do a lot of things with money now to make that be a net gain.  You can invest it, start a company, build a factory (if you’re a corporation), and all those things can net you a bigger gain than the interest and principle you will need to pay back.  The difficulty is of course that the real world is a world of uncertainty, you don’t know for sure if your investments will pan out or your factory will work, you’re taking a risk and that risk includes a downside.

In Capitalism 2 however there is near perfect information so most of the risk doesn’t exist.  You know instantly what the price of every good on the market is and how they will change in the future.  You know exactly who your competitors are and usually you know what they’re building.  With perfect information there is almost zero risk, and with zero risk there is never a reason not to max out your available loans to build new factories to make new profits.  The AIs in this game by the way don’t seem to be programmed to ever take loans, they wait until they have the cash in hand before ever buying something, so this is a technique only available to the player.  But as I said pretty much any investment is a certain success, so loans are just free capital for the player.  And that’s why they’re so OP in Capitalism 2.

Why do people still try to defend cryptocurrency as being “early” technology? This isn’t growing pains, it’s a scam

Bitcoin was launched in January of 2009, making it roughly 13.5 years old by now.  In that time, it has gone from scam to scam to scam and yet time and again the True Believers make excuses for both it and the entire cryptocurrency ecosystem.  “The tech is still early,” “it’s like the early days of the internet” “any day now mass market use will take off” and it NEVER EVER DOES.  Let’s get some context going:

Google was incorporated in 1998, and by 2008 it had 20 billion dollars in revenue.  Not valuation mind you, yearly revenue

Amazon was launched in 1994, and by 2005 they were offering Amazon Prime, which promised unlimited 2-day shipping on over a million in-stock items for a modest yearly fee

Microsoft was founded in 1975 and by 1985 they launched the Windows 1 which sold over half a million units.

Each of these modern tech giants started small, but had reached mass market appeal in less than a decade.  What does Bitcoin have?  Where is the mass market adoption of Bitcoin as a unit of currency?  Where are the merchants and vendors who take Bitcoin instead of Visa or Mastercard?  Time and again minor partnerships area announced where some sucker claims to accept Bitcoin, Bitcoiners exclaim that this is the beginning of mass adoption, and then Bitcoin is quietly removed from the available payment methods or ends up being the smallest method used by a large amount.  Bitcoin doesn’t compete with PayPal, or Apple Pay or any credit card or payment processor because it sucks and always has sucked.  And mass adoption isn’t right around the corner, we aren’t in the early days of Bitcoin we’re over a decade in and it is still useful for nothing more than scams and ponzi schemes.  Every now and then new stories pop up that *this* time it will be different, *this* will definitely be the start of mass adoption.  And of course every time it’s wrong.  I could go through every year from 2010 to today and find someone claiming that this would be the start of mass adoption too.  It’s always been nothing more than scams and hype.

I’ve decided to write a post in Chinese, just to see if I can

Go to the bottom to see my English translation of what I was trying to write

这些天我觉得我的学中文的时间无用。在高中学，我四年学了中文。大学的时候我在学了四年的中文。可是在美国我不可能用这个语文。我的同工不说，我的新闻不用，每一个我的美国的生活的东西是英文的，不是中文的。

可是我特别长的时候学了中文。我特别努力。我想用我的技能。我可以写一下，我可以说一下，可是听，看，都难死了。

我不知道要是这个是真的中文还是写错了的gibberish。我不知道很多有用的词，可是我怎么可以学新词？我已经说：我没有说中文的朋友，新闻，东西。

我试了一下看中文书。太难了，我的中文不太好。我不觉得太高兴了，也是写这个东西不太好的意思。下次我一定必须写关于别的话题。

These days I think my time studying Chinese was useless.  In High School, I studied Chinese for four years.  When I was in University I studied four more years of Chinese.  But in America I can’t use this language.  My coworkers don’t speak it, my news doesn’t use it, everything in my American life is English, not Chinese.

But I studied Chinese for so long.  I worked so hard.  I want to use my skills.  I can write a little, I can speak a little, but listening and reading are both too hard.

I don’t know if this is true Chinese language or incorrectly written gibberish.  I don’t know a lot of useful vocabulation, but how can I study new vocabulary?  I already said it: I don’t have friends, news, or things that use Chinese.

I tried a little to read Chinese books.  Too hard, my Chinese is not too good.  I don’t feel too happy, also writing this stuff isn’t too interesting.  Next time I definitely must write about a different topic.

Can you gamify science?

Let’s start with one of the oldest and most popular games: Super Mario Bros for the NES.  In it, the player controls Mario past a number of hazards, through a number of levels to rescue the princess.  Young children in the 80s and 90s would spend hours upon hours playing, beating and (important for today’s topic) *learning* this game.  See, beating a video game is a learning process.  As kids play, they learn to play better and better until they play well enough to beat it.  Then they keep playing and learn to play better and better to beat it faster, more consistently, more stylishly or what have you.  Some of this learning is physical, you can train your reflexes to work faster, but a lot of it is actually learning how the game works and what you need to do to complete it.

On the surface, learning how the game works seems kind of basic, but is it?  The game has a large number of enemies with their own patterns, and those enemy patterns can combine in a large number of ways to challenge the player.  The player has to learn how to approach each situation, and how to adapt to a situation that isn’t going how they expected it to.  They may even plan ahead and devise multiple strategies before testing each one out in turn and going with whichever is best.  The player might also be memorizing the map layouts of the levels, the locations of secrets, and all sorts of other things.  It’s safe to say that a lot of real learning is taking place, even if it isn’t “school learning” like what we’re used to.  

Kids do a lot of work learning to play video games, and thus since the very dawn of video games parents and teachers have wondered if that energy could be more productively transferred towards academic learning.  This eventually morphed into a “gamification” push, where many modern schools will put at least some effort into having gamification elements in their teaching in order to motivate students to work as hard at academic learning as they do at gaming learning.  Now, gamification is an INCREDIBLY broad topic and it doesn’t just cover video games that try to teach you things.  I can personally remember playing cheesy point-and-click video games that tried to teach me the parts of the body or the planets of the solar system, but video games themselves are only a small facet.  Gamification can also be as simple as having class leaderboards to encourage students to do well and get good grades, badges or points for completing certain tasks, there are all sorts of ways to gamify a learning task.

But this brings me to today’s question: can you gamify science education?  Now first off it’s very clear that you can gamify *early* science education (thinks like elementary or middle school) since we’ve had those sorts of things for years.  Teaching a student about the human body, or the planets, or the teacher creating a whole Jeopardy! setup to help them learn the parts of a cell, these are all gamification aspects that were used to teach me and many others about science over the past few decades.  But post-secondary education is a different beast and often entails learning things on the cutting edge that aren’t always fully accepted by the entire community.  Science does have its internal struggles, and if a student learns by reading papers (which is necessary to study topics on the cutting edge) they will by necessity be learning about at least some ideas which will later be proven false.  That’s ok, science isn’t a set of facts, it’s a process for discovering the truth, but that does make it harder to “gamify” since you can’t just program a game with right and wrong answers, because on the cutting edge *we don’t have all the right and wrong answers* and we’re learning new things every day.

I thought long and hard about this question: can you make a video game (or something like it) that would allow students to study a cutting edge topic like proteomics?  I pick this topic because it’s one I know a lot about, and I came away thinking the answer is “no.”  A proteomics game would either be highly simplistic and thus not very useful for cutting edge studies (high school studies perhaps), or would be so complex that you were really studying someone’s protein simulation and not proteomics itself.  Let me explain.

A video game for proteomics would have to have certain limitations.  The first limitation is the pre-defined actions that the programmers allow.  Mario can’t climb walls in Super Mario Bros because the programmers didn’t program that, they only programmed certain actions.  As far as I know, all proteins are biologically synthesized in an N-to-C direction.  So presumably the program would only allow synthesis in this direction, but what if we discover some organism that can synthesize C-to-N?  What if we discover organisms that synthesize or modify their proteins in ways we did not expect, and what if those proteins become scientifically or economically relevant?  A programmer can’t exactly predict every possible action that biological proteins could take, and so can hardly program every possibility.  

OK, so they can’t program every possibility, but what about creating an open-ended system that would allow the “players” to create their own actions?  That brings limitation number two: the approximations used.  An open ended proteomics game would by necessity need to employ certain approximations in the code to allow for proteins to be synthesized and moved around at will, it isn’t feasible to create a perfect simulation that can calculate the effects of every atom and bond in a protein.  So a game would have to use a number of approximations to allow for this open endedness, but then you end up with the problem where students may not be studying anything real but studying only an approximate model that doesn’t work in the real world.  My most notable reminder of this is the game Kerbal Space Program which is a fun little astronaut simulator that, due to computer limitations, has to use a set of heavy approximations for gravity that make it very inaccurate with the real world.  This leads to some fun but physically impossible creations such as perpetual motion machines and giant mecha.  

It’s not just the scope but the scale.  You can do so many things with proteins, there are 20^10 combinations of 10 amino acids.  All those possibilities can’t be programmed in.  The best molecular dynamics currently has is the ability for super computers to roughly approximate the actions of proteins by simulating all the atoms and bonds, but even those simulations require heavy approximations.  So if you try to make more and more approximations, you end up with a program where students aren’t studying proteomics but rather studying the approximations that are built into it.  

The final, most important piece of this is: how would you make such a thing fun?  Science, as in actual science, is fun to me because I get to learn and discover new things.  As said before, a video game would necessitate such approximations that nothing “new” could really be discovered.  Games like Kerbal Space Program are fun because they give you the means to perform some of humanity’s greatest feats for yourself like going to the moon or launching a robot to Mars, but what are the equivalent actions that could be done in a proteomics video game?  I honestly can’t think of anything proteomic that makes me think “man I’d like to do that for myself!”

So yeah sorry to be a debbie downer but I think the idea is unworkable for now.  Stick with fun little games for early childhood education and then read papers when you go to college.

Do dividends solve inflation?  Yes in theory, who knows in practice.

Congress just passed the CHIPS act giving billions of dollars to Intel, who turned around and cut their fab investments to hand money to investors as dividends.  One of the benefits of CHIPS was supposed to be reducing inflation by increasing the supply of microchips from companies building more fabs.  That obviously won’t be the case if companies follow Intel’s lead in handing the subsidies to their investors as a dividend.  But it made me think of how neoliberal economics believes that inflation is supposed to be self-correcting.

When demand for a particular product outstrips supply, prices will of course rise.  But what are the consequences of a rise in price?  First it means the consumers of the product will have higher costs, but that will incentivize consumers to use less of the product (reducing their demand and thus costs).  If those consumers are companies, then this can act as a market force driving efficiency, companies that can produce the same number or quality of output products while using less of the pricier input products will have an advantage over those who are more hamstrung.  In some ways we are seeing this with car companies offering cars that don’t have the full range of interior knick knacks due to the chip shortage.  If they can still produce a car while using less computer chips, then they will have an advantage over companies that cannot.  This means that the more efficient companies should remain competitive while the less efficient ones get removed from the market, thereby decreasing demand for the chips overall thanks to these efficiency gains.

For producers of the product however, when prices rise the company makes more money.  Now not all that money will be reinvested in the company, a lot of it will be handed back to the shareholders in the form of dividends.  But to neoliberals that isn’t a problem, that’s the solution.  When the company hands big dividends to its shareholders, the price of the company’s stock will rise greatly.  Everyone and their mother will realize that holding that company’s stock will net you a passive dividend income, and will rush to buy up the shares, driving share price up.  As I noted before companies like having a high share price because it gives them a source of money that they control.  They can use that share price to compensate employees and invest in large capital projects, both of which can theoretically lead to higher production either through higher quality/more motivated employees or through more factories or whatever.  And not only that, the return on investment for dividends should cause more money to flow into new companies as well that want to enter the market, because no one can resist those sweet sweet profits.  This higher production means supply increases and the cost of the good goes back down, thus massive dividends from profitable products are supposed to act as a reward mechanism that entices more investors to invest in that sector of the economy.

This paradigm, by the way, is why some neoliberal economists will oppose market interventions to alleviate shortages.  Price controls or rationing of good are supposed to mess up both the demand and supply side of the equation.  If price is controlled then the supplying company can’t make a higher profit, meaning they can’t expand supply and new companies won’t enter the market.  Likewise price controls mean that there isn’t as much gain from being an efficient demand-side company.  Rationing works much the same way as price controls, artificially keeping the price low by constraining demand.

So according to this theory of economics, supply-induced inflation should always be self-correcting.  The high price of chips should have pushed demand-side companies to buy less of them, and supply-side companies to sell more of them, both of which push the price down.  The question is whether any of this works in the real world, and the bigger question is whether the CHIPS act will sufficiently spur investment in fabs considering the money has basically no strings attached.  We’ll have to wait and see if every company decides to act like Intel.

I just need to get out of my system how weird Pokémon Conquest is

You all know Pokémon, right?  That game about cute animals battling each other that’s so popular with kids and young adults.  I’ve been a fan all my life and recently got into the DS game Pokémon Conquest because it was described to me as Pokémon meets Fire Emblem.  So far so good.  The game is set during an alt-history warring states period in which all the warriors of Japan use Pokémon to fight each other.  The “Kingdoms” of Pokémon Conquest are all elementally-aligned and so take the place of the traditional Pokémon gyms.  There’s the fire kingdom, the water kingdom, the grass kingdom, and our heroes have to defeat them all to reunite Japan.  

The moderate amounts of insanity begin early on, however when we find out that Nobunaga is also a Pokémon trainer and is trying to conquer Japan himself.  In Japanese culture Nobunaga was once described to me as “George Washington Hitler” due to the complex and often contradictory role he is seen in.  On the one hand he was the Great Unifier who’s successes in uniting Japan lead to the direct predecessor of the modern Japanese state and the end of the Sengoku period.  This characterization can lead to positive portrayals.  On the other hand he is often viewed as needlessly, even gleefully cruel and portrayed in some media as a diabolical schemer taking pleasure in the pain of others.  So when I saw him in a Pokémon game I did not know what to expect.

Insanity ramps up when the game reveals that your assistant, an unconfident girl with a Jigglypuff named Oichi, is also the secret sister of Nobunaga.  Nobunaga reveals that his signature Pokémon is the Gen V legendary Zekrom, so I guess that’s how he conquered Japan, by using a legendary Pokémon.  But I couldn’t get over my laughter at how the game decided that the shy assistant girl would be the sister of the main antagonist, like sure that’s storytelling plot twist #1: have a secret relationship.  But it seemed so out of the blue and didn’t really add much to how I saw either character.  It didn’t add dimensions to Nobunaga because we barely see him, and it didn’t add dimensions to Oichi because she barely has character and neither she nor anyone else acts differently because of this revelation.  It felt like a twist for twist’s sake.

The highlight of this game’s weird and wacky insanity was when your main character evolves.  Yes that’s right, in this game Pokémon aren’t the only ones who evolve.  After a bunch of events happen the main character evolves into a cooler version of themselves, with all the evolution sound effects and music that you’d expect from a Pokémon evolution, and they aren’t the only ones that can do that.  Oichi herself can evolve too, as can some of the other main characters if certain conditions are met.  I wonder if this power will ever carry over to the main games?  I should ask my friends if anyone ever evolved in Pokémon Legends, Arceus.

The finally hilarity for me was the finale where you reveal that the continent you’re on bears more relation to Arceus (the Poké-God) then to historical Japan, and Arceus itself comes down and basically says that your main character should be the one to defeat/catch it.  OK sure, whatever, catch ‘em all.  But God himself coming down and saying “catch me bro” just put the final pin in the corkboard for me, I think this game is a comedy and I wish it had gone all out on it.  Maybe it’s because I’m not 10 anymore, maybe this would feel like a stirring epic if I’d played it as a kid, but I couldn’t keep a straight face through any of it.  There are some things that are just instantly hilarious to me, and mixing Pokémon with history is one of them.  I still giggle at how Lt. Surge apparently fought in wars with his Raichu, and now we can add him to the long list of war-fighting trainers from this game.

Pokémon Conquest: how Eevee and Jigglypuff reunited Japan.

Why do companies give out dividends in the first place?

I took a class on economics in high school, and as part of that class we had a classroom discussion on the stock market.  In that discussion, one of the most confusing parts for me was dividends.  It seemed crazy that companies will just give you free money if you buy their stocks, what do the companies get in return?  Other folks my age were more cynical, they thought that dividends were just how rich people paid themselves to avoid taxes.  Well dividends aren’t free money, and they aren’t *entirely* a tax dodge, they actually play an important part in the stock market.

As stated in a previous post, dividends are one way that a stock has value to an investor.  Even if a stock doesn’t currently give out dividends, there can be an expectation that they will in the future, and as stated the expected value of all future dividends (divided by uncertainty, multiplied by money now>money later) is part of what gives a stock value.  So if companies want their stock price to be high (and thus the value of their company to be high), they will often give a dividend to prop up the stock price.  But why would they care about a high stock price?  The important thing about stocks is that they are a source of money that the company controls.  The company can do a lot of things with stock: it can pay employees in stock, it can raise money by selling stock, it can purchase other companies with its own stock. Money is power, if a company has a whole lot of value because they have a giant stock price, then all sorts of methods to raise money and acquire assets become available.

So dividends aren’t a scam and stocks aren’t a ponzi scheme.  Companies pay dividends in order to have a higher stock price, which they want in order to finance their company’s expansion should the need arise.  These dividends are part of what give stocks value, and they are one of the reasons that no matter what Bitcoiners tell you, stocks are not ponzi schemes.

Why would investors invest in non-voting shares?

I said yesterday that stock has value in part because the investor is owning something real, a tiny part of a larger company.  With that ownership usually comes the right to vote on the direction of the company, but not always.  Some companies like Google, New York Times, and WWE have a dual-share system whereby only certain shares are “voting” shares and all others have no right to vote on the direction of the company.  Or in Google’s case, many shares are voting shares but thanks to “super-voting” shares two people (Larry Page and Sergey Brin) hold 51% of voting rights and can never be outvoted by investors. Why would an investor buy shares knowing they don’t come with any rights?

Well first of all there is still some small amount of rights that come with a share, your ownership must be compensated if the company gets bought.  And of course the share may still come with a dividend or an expectation of a dividend.  But without the ability to change the company by voting, the shareholders have no input on the dividend or the direction of the company in general.  I think that for large shareholders, they still have an expectation that they can move the direction of the company even without voting rights.  BlackRock and Vanguard Group, for example, are some of the largest holders of Google stock, and if they were to exit the company in a hurry it could crash the price.  Now these companies don’t want their Google investment to fail, they want Google to succeed so they succeed with it, but if they believe that the company is hopeless they can always exit in a hurry.  And because they are major investors (and their exit would crash the stock price), they have the ability to talk with Google higher ups on the regular.  This gives them an interpersonal line of communication to voice their grievances and request changes, even if they have no legal recourse to change Google’s behavior.  Google in turn doesn’t want to upset major investors, and so may acquiesce to some things in exchange for investor assurances.

These sorts of interpersonal dynamics go on all the time in the world of finance behind closed doors.  We can read countless examples of them from the 20th century since people retired and wrote tell-all books, but I doubt we’ll get any about Google until those books are written in the future.  But interpersonal relationships between investors and management can be as or more important than the legal framework that regulates them.  Large investors have some amount of power and access with a company, even if using their power by selling the stock would hurt the investor as much as the company.  Meanwhile management wants as high a stock price as possible and so can make an effort to placate the investors.  In this way, at least some investors will still feel that they have input into the direction of the company, even if they can’t change its direction by voting.

Now, with this voting vs non-voting shares, I do think this is neo-feudalism and must be stopped.  The WWE shares, for instance, stipulate that only the descendants of Vince McMahon can ever hold the super-voting shares in the company, any shares sold by them get converted into lower-voting or non-shares.  This allows people to inherit what are basically titles of nobility that no one else could ever have.  Only the descendants of ennobled investors can ever steer the direction of the company, even if they own far fewer shares the the other investors.  Capitalism is supposed to be plutocratic and this sort of hereditary nobility will do more to harm competition than any possible good it could do.  It’s no accident that the poorest countries during the industrial revolution of the 19th century were those that held on tightest to nobility and titles, money can’t compete with inherited rights.

A free market absolutist might claim that you can just start your own business and replace Google or WWE but we all know that’s not how the world works.  Large companies can have an outsized influence to maintain their market share even if there is some modicum of competition so that they don’t count as “monopolies.”  In the end, ennobled families will hold unwarranted power over cornerstones of the world economy, and those cornerstones will be hard to replace due to their sheer size and ability to buy or outlast the competition.  In the end, we’re all worse off.

The president of El Salvador is playing a dangerous game

El Salvador became internet famous about a year ago first when President Bukele declared that they would be the world’s first country with Bitcoin as a legal tender and second when their president began having his government buy Bitcoin as a “sovereign wealth fund.”  But flirtations with the Bitcoin ponzi are not even El Salvador’s biggest problem.  El Salvador owes billions of dollars in sovereign debt, and due to a large government deficit and little hope of improving economic conditions, the debt is currently at junk status.  The status of debt is basically how people express the risk of the debt not being paid back in full, and for El Salvador that risk is very high.  The money markets that have lent money to El Salvador believe it to be somewhat likely that El Salvador will default on its debt, leaving them with either nothing or less than the full amount that they lent, and because of that the debt is considered to be junk status.

What is a default?  A default is basically where a country declares it won’t pay back its debt.  It may be a partial default (we won’t pay back specific bonds) or a “haircut” (we’ll pay back only a certain percentage of what we owe) or a total default (we won’t pay back anything).  But a default leaves the lenders with less than the face value of the debt they lent to the country, and it in turn makes other lenders way less likely to lend money to that country.  Think about it, if you lend a buddy 100$ and he never pays you back, will you lend him another 100$ next time?

Now even junk debt isn’t worthless.  It may be *likely* that El Salvador defaults but it is not *certain*.  So if you hold an IOU from El Salvador, you can still try to make money off of it.  Let’s say you own El Salvador government debt worth 100$.  You think it unlikely that you’ll get back the full 100$ but someone else will buy the debt from you for 20$.  You’re taking a loss by selling the debt instead of waiting for El Salvador to pay up, but the 20$ they will give you is more than the 0$ you think El Salvador will give you, so you go ahead and sell it.  This sort of debt market happens all the time as institutions sell and buy debt based on their expectations of how likely the debt is to be paid back.  As economic conditions improve, the likelihood of being paid back increases and the price of the debt can rise, while worsening economic conditions would make it fall.

The problem is that President Bukele saw this debt market, and he hatched a scheme.  The debt markets think that El Salvador is unlikely to pay back its debt, and so 100$ of debt can be bought for 20$.  Well, thought the president, what if El Salvador just buys back the debt itself?  Now we can wipe away 100$ of debt for just 20$, genius!  Except not really, the debt is trading cheaply on the expectation that it won’t be paid back in full.  Buying it at this discount is an admittance that El Salvador won’t pay it back in full, they won’t pay back 100$ for 100$ worth of debt, they’ll pay back 20$.  In some ways that is a de facto default, and in the future when El Salvador wants to take out a loan (and remember they need loans to cover their deficit), banks will be very leery of giving a loan to a country that basically entered a partial default.  Secondly, President Bukele announced this scheme on twitter, and with this public announcement the price of El Salvador’s debt went way way up.  Obviously a lot of people holding El Salvador’s debt expected to get nothing, so with the public announcement of a buyback they now expect to get something and will raise their prices accordingly.  If the president thought he could buy back all the debt on the cheap, he’s very likely to be mistaken.

I don’t know who advises the president of El Salvador, but it seems like he does financial policy without much understanding of the effects.  By the way, this entire article is written using dollar denomination because El Salvador’s debt is denominated in dollars and dollars are an official currency (alongside Bitcoin). It’s probably one of the reasons El Salvador doesn’t have many economic levers to pull, they don’t control their own money supply.