Monthly Archives: March 2012

Pressure Drop

On Saturday night I found myself in Melbourne at the first live performance in 30 years of the reggae band Pressure Drop.

The last time Pressure Drop played I probably couldn’t have told you what reggae was. Although I would certainly have heard Eddy Grant’s Electric Avenue on the radio, I was a New Romantic at heart and was more inclined to listen to the likes of Adam and the Ants. At this point, in the interests of full disclosure, I should admit that Pressure Drop’s concert was the second of the weekend for me: I also saw Adam Ant at the Enmore Theatre the night before.

Since my New Romantic period, I have learned to appreciate reggae and dub, but that doesn’t explain why I came to be in the audience at the Caravan Music Club. The real reason was that Pressure Drop’s guitarist is Bill Mitchell, macroeconomist, Modern Monetary Theory (MMT) pioneer and the man behind Billy Blog.

Bill and I first came into contact in 2008 when we both blogged about alternative Olympic medal tallies (my post is here and Bill’s is here). I then became very interested in Bill’s expositions on the importance a country’s monetary system has for understanding the possibilities for fiscal policy. Bill’s ideas were the inspiration of many of my posts, such as Blame Greece’s Debt Crisis on the Euro and Park the Debt Truck and I eventually came to know Bill in person after attending a couple of CofFEE conferences.

Bill’s academic interests extend from the workings of money, to concerns about full employment and equity (my only podcast to date featured Bill explaining his idea of a job guarantee, which is underpinned by an understanding of MMT). Since reggae has its roots in concerns about social justice, it came as no real surprise to learn that Bill had once played reggae. Then last year the band started rehearsing again and these rehearsals culminated in the release of a new CD, aLIVE 2011. I was keen to hear the results and I suspect I was one of the first to order a copy.

Pressure Drop

Although Bill is based in Newcastle these days, Pressure Drop had always been a Melbourne band, so it was only natural that their return performance should be in Melbourne. I had been planning a trip to Melbourne for some time and fortuitously it coincided with the night of the concert. So it was that I found myself out at Oakleigh RSL on Saturday night.

Bill Mitchell on guitar with Pressure Drop

Before Pressure Drop and after I beat my brother at a game of pool, there was a two piece support act: Ross Hannaford (of Daddy Cool fame) and Bart Willoughby, the drummer from No Fixed Address. I would hate to imagine how many years Brian has being playing guitar, but he is certainly able to coax beautiful sounds from those strings, apparently with no effort at all.

Once Pressure Drop came to the stage, it wasn’t long before dancing began. Bill had plenty of reverb on his guitar, but not so much as to hide the fact that he can play as well as he can blog (more than can be said for me). The band had a house full of enthusiastic supporters and they did not disappoint. The concert was great fun for all of us on the dance floor and it looked as though the band enjoyed themselves just as much. Don’t be surprised if Bill trades his professorial chair for a Fender on a permanent basis.

With the iPhone in hand, I managed to get a few photographs (the band has posted more here) and even a couple of brief video clips which I have crudely spliced.

I’ll be keeping an eye out now to see whether Pressure Drop decide to take the band on the road and play in Sydney. I can’t be sure when I’ll be in Melbourne next.

UPDATE: here is a video of the entire concert (1:40).

Bitcoin revisited

Just over a year ago, I wrote about the digital “crypto-currency” Bitcoin. It has been an eventful year for Bitcoin.

Designed to provide a secure yet anonymous, decentralised means for making payments online, the first Bitcoins were virtually minted in 2009. By early 2011, Bitcoin had begun to attract attention. Various sites, including the not-for-profit champion of rights online, the Electronic Frontier Foundation (EFF), began accepting Bitcoins as payment. But when Gawker reported that Bitcoins could be used to buy drugs on “underground” website Silk Road, interest in the currency exploded and within a few days, the price of Bitcoins soared to almost $30.

This kind of attention was unwelcome for some, and shortly afterwards EFF announced that they would no longer be accepting Bitcoins, fearing that this would be construed as an endorsement of the now controversial currency. Around the same time, the first major theft of Bitcoins was reported and the Bitcoin exchange rate fell sharply.

Bitcoin price history

Bitcoin Exchange Rate

More recently, another high-profile theft has caused ructions in the Bitcoin economy, prompting e-payments provider and PayPal competitor, Paxum, to abandon the Bitcoin experiment, which in turn forced one of the larger Bitcoin “exchanges” to shut down. The anonymity of Bitcoin is a design feature, but it also makes it almost impossible to trace thieves once they have their virtual hands on Bitcoins.

How much damage this does to the fledgling currency remains to be seen, but it certainly makes for a volatile currency. The free-floating Australian dollar is a reasonably volatile real-world currency but, as is evident in the chart below, Bitcoin volatility is an order of magnitude higher. That in itself is reason enough for any online business to think twice about accepting Bitcoins.

Bitcoin volatilityRolling 30 day volatility (annualised)

Whatever its future, Bitcoin is a fascinating experiment and, even if it does not survive, digital currencies of one form or another are surely here to stay.

Data sources: Bitcoin charts, Bloomberg.