Attending Spanish School every weekday morning, I spend a lot of time thinking about etymology, and language in general. I also spend a lot of time thinking about money and freedom. Recently, it occurred to me that the words in various languages for “money” and “freedom” (and “weight”, it turns out) are related in interesting ways. For instance, the Peso is the local currency in many Spanish-speaking countries. “Peso” also happens to be the Spanish word for “weight”. Gold, our oldest surviving currency, and the material long considered the best “hard money” by students of the Austrian School of economics, is measured not by bills, coins, or shares, but by weight. And of course, the British currency is the Pound, which is also the word for our pre-metric unit of weight.
The Spanish word for “pound”, meanwhile, is “libra”, which shares the same Latin root as our English word “liberty”. Biggie’s classic notwithstanding, most people would agree that money equals freedom. Delinquent debtors throughout history have been imprisoned alongside thieves and violent criminals. Even today, when people can’t pay their court-ordered fines, they are thrown in jail. (The logic behind this policy seems questionable, as prisoners have a hard time earning money to pay their debts, not to mention the fact that it costs the state even more money to keep prisoners in jail…) And money literally equals freedom (at least temporarily) for those awaiting trial in some countries, who can buy some time on the outside by posting a bail bond.
It’s fitting then that Facebook has named it’s forthcoming cryptocurrency the Libra, referencing both weight and freedom. More than any crypto issued to-date, the Libra has the potential to reach a vast, global population in very short order. The Libra purports, eventually, to become a global, standard currency free of state control and manipulation, designed for everyday purchases, peer-to-peer transfers, and international remittances. The Libra aspires to bank the un- and underbanked, providing those billions of people with a level of financial freedom unmatched in modern history.
But most importantly, in my opinion, the Libra will introduce the mainstream population to cryptocurrency in general, and inevitably to Bitcoin, the only truly decentralized, censorship-resistant, non-manipulable “sound money“, and the best store-of-value humanity has known since the days when money was measured by weight – before the days when governments and despots began manipulating their currencies by carving slivers off their coins without changing their nominal value. (Side note: the ridges around most modern coins are intended to instill confidence that the coins have not been devalued by carving; pay no mind to the printing press behind the Fed’s curtain.)
While I’m very bullish on the Libra, I don’t expect it to be true sound money, at least not initially. The Libra will be pegged to a fiat currency – most likely $USD – making it an inflationary currency subject to the whims of central bankers and their puppet masters. But it’s interesting to imagine a future in which the foundation that supports the Libra might decide to sever its Dollar peg. Such a move would be tactically similar but strategically opposite to the Nixon administration’s 1971 decision to break fully from the gold standard, completing a move initiated by FDR almost 40 years earlier.
FRD et al broke from the gold standard in order to explicitly inflate the money supply. I imagine (read: hope) that the Libra Association might break from its Dollar standard in order to cut loose that inflationary ballast which would otherwise weigh down the Libra’s purchasing power. For now, I remain optimistic that the Libra may one day become a true sound money. Sound money is freedom, weight is worth, and language is fun!
Parting thought: when travelling in Latin America, don’t confuse “atravejas” with “avestruces”. You might end up with a side dish you weren’t expecting.