The Y chromosome — reports of its death are greatly exaggerated

What is this nonsense I keep hearing about the death of the Y chromosome and the "extinction of men"? I cannot believe that responsible scientists can have suggested this, except in the most tongue-in-cheek fashion, as being a valid interpretation of the facts. The latest "news" is that it's not going to happen after all — well, a child could have told them that! Last I heard, men are necessary for new babies, and the extinction of men would be followed in pretty short order by the extinction of women, and that's that!

The really crazy thing is that some reports have allegedly suggested that after the extinction of men, women would "evolve" to not need them for procreation. Though how they are going to evolve if they can't get pregnant in the first place is beyond me; these people do understand that it takes millions of years for a species to achieve parthenogenesis, right? This particular strand of idiocy also confuses cause and effect: it's one thing for species that has adopted parthenogenesis as its main strategy to subsequently lose its males, it would be quite another thing for a species which has somehow lost its males to achieve parthenogenic abilities!

Paper money, gold coins, BitCoins

As always, doing catch-up reading of Zero Hedge. My eye alights on a little article proposing a (post-diluvial) gold-based currency. Note: gold-based not just gold-backed. His idea is that part of the difficulty with a 100% gold-backed currency — that you can't expand it to cope with new goods being produced — will be solved by simply using gold coins instead, and relying on velocity of circulation. I'm not so sure about that: if your currency really is 100% backed by gold, then each unit is ipso facto "the same as" some amount of gold, so you gain nothing by moving the gold around. Indeed, you continually lose a little bit to wear and tear, and perhaps to thieves who can be guaranteed to find ever-smarter ways to remove a little bit of gold from a coin without the next guy noticing. They didn't invent milled edges for nothing, after all. The velocity of circulation argument seems to be a red-herring too, no, in my view, you'd just have to rely on deflationary effects to sort out the money supply: if I open up a widget factory, the supply of widgets increases and their price falls, all expansion of the money supply does is cover up that basic fact, so let's just accept it instead.

Anyway, none of that is the point of this post, though there's a clue in the wear and tear reference above. It's that coins — at least those that depend on their precious metal content for their value — are an essentially analog specie. Notes on the other hand, are essentially digital. If I shave a tiny scrap off a gold coin, I reduce its value; if I do the same with a dollar bill I am left with ... a dollar bill plus a tiny, worthless, scrap of paper.

Now I'm as impressed as anybody else by what seems to be happening, simultaneously, to the money supplies of independent nations (and blocs) all over the world, and I do think that we risk seeing coordinated runaway hyperinflation on a global basis some time in the next twenty years. But. But... we are not going to be giving up our mobile phones and their NFC payments, or our online shopping for that matter. So I don't see gold making a comeback as an actual circulating currency. As one amongst many stores of value, yes, certainly, but not as circulating coinage. It's just not digital enough, and it's not "e-digital" at all.

So what can provide a store of value and medium of exchange in an e-digital world, and one that's unadulterable by thief and government alike? The only thing I can think of is BitCoin, the subject of much derision by professional economists. It doesn't help, either, that one of the few functioning BitCoin exchanges (and vaults) closed its doors this week. However, historically, many currencies have stumbled after their introduction (one thinks of ... oh ... the Euro), so none of this negativity is necessarily a guide. As a result of this train of thought I've now decided that I'm more positive with respect to BitCoin's prospects: it, or something like it, probably has a part to play in the future.

One intriguing suggestion as to how BitCoin might start to be used more, that I came across recently, is that it would make a perfect in-game currency. This really is rather appealing: if nothing else, it would provide instant convertibility between in-game artefacts in different games, without the necessity (and possible legal complications) of involving state-backed currencies. Also it would provide economists with perhaps a better way of comparing the sizes of game economies. What's not to like?

François Hollande

A nice little article on France's probable next president. What I especially like about it is that it makes clear that the policies that lead to Europe's debt crisis will likely be repeated many times yet, because they stem from a mind set that is still firmly entrenched in European elites, albeit one in temporary retreat.

The danger is that once Europe starts showing some signs of healing, politicians on the left will sweep into power, cast off the yoke of "austerity" (i.e. financial discipline) and start enacting popular tax and spend policies (or worse, borrow and spend policies, for those who can). One thinks shudderingly of Ed Balls.

Bundesbank dragged into the red buying up peripheral debt

This is rather tragic news. Merkel's constant doubling-down (or doubling up, they appear to mean the same thing) with regard to the PIIGS reminds me of the problems with the South Korean chaebol in the late nineties, where losses in a few subsidiaries were subsidised by the rest of the group, and were thus not properly addressed until they became so large that they brought down whole conglomerates. Wikipedia summarises it thus (note the parallels with the euro zone):

Many of the chaebol had become severely indebted to finance their expansion, not only to state industrial banks, but to independent banks and their own financial services subsidiaries. In the aftermath of the crisis when they could not service their debt, banks could neither foreclose nor write off bad loans without themselves collapsing. The most spectacular example came in mid-1999 with the collapse of the Daewoo Group, which had some US$80 billion in unpaid debt. At the time, it was the largest corporate bankruptcy in history.

Investigations also exposed widespread corruption in the chaebol, particularly fraudulent accounting and bribery.

The article makes it clear that this could theoretically end with the ruination of the Bundesbank, which does not benefit from Government guarantees. As a symbol of economic strength and financial probity, the Bundesbank has a special place in the German psyche, in the German identity. Though I don't doubt for a moment that the state would step in to rescue it, that might end up with a steep loss of independence — indeed, I wonder if that's actually the game plan somewhere in Brussels?