From Riches to Rags
After four days in Santiago, spending time with members of Chile’s Libertarian Party and familiarizing myself with the country for the first time, I travelled to Colombia to visit my maternal family. One of the touristic visits I made during my time in Bogota deeply concerned me, for reasons which should soon be apparent.
Next to the renowned artist Fernando Botero’s former house and gallery is the Currency Museum (“La Casa de la Moneda”), which my longtime friend and I visited. This museum exhibits Colombia’s currency through the ages, and it is a real eye-opener. At least since my first visit to the country in 1994, the smallest printed bill available is for 1000 pesos, though there are coins for as little as 100 pesos. Yet on display in the Currency Museum are bills from the Republic’s early history, during which at one time it was worthwhile to print a bill for one peso! Just for context, a coin of 300 pesos may be enough just to buy the equivalent of Bazooka Joe®️ gum (if this brand even exists anymore), such that one peso nowadays is an unthinkably infinitesimal amount, the functional equivalent of a Satoshi.
As if driving the point homewards, around the corner from the Currency Museum, a Venezuelan peddler offered remarkable artisanry created from otherwise useless Venezuelan cash. There were crucifixes, animals, baskets… all sorts of items created from braided bolivars. Wisely capitalizing on the museum’s visitors’ interest in currency, the peddler even offered packs of assorted bolivars for a small price. Thus, the museum exhibited the national currency’s past… and the peddler exhibited its 𝘱𝘰𝘴𝘴𝘪𝘣𝘭𝘦 future.
In our personal lives, we have to moderate our otherwise boundless desires to live within our budgets. When we see the latest shiny smartphone, we have to be smarter by denying ourselves the upgrade if not within our planned budget. When we mismanage our finances, then only we suffer the effects of this mismanagement, as through scarcer, more expensive credit lines and the like. When whole countries mismanage their finances, then everyone suffers. In fact, individual persons who save money may be even more harmed by financial mismanagement on the national level since they forego the money's present use in favor of its future, yet the spendthrift enjoys the present value before the country debases it. This is the danger of fiat currency, untied to any fixed commodity like gold. It grants to government nearly unbridled leeway for inflating the currency to meet potentially infinite present desires, which devalues the currency and robs the citizenry of future financial security.
Fervently I hope that Colombia and all countries avoid the allure to debasing fiat currency. But if they insist on doing it, hopefully they'll be someone on hand who can craft pretty baskets from the worthless cash.
