He might be 71, but Steve Forbes, Editor-in-Chief of Forbes (watch a video of him here), still has it. He has published a brilliant open letter to Mark Zuckerberg, the boss of Facebook, on Zuck’s proposed digital currency, Libra. It’s a piece of incisive analysis about Libra that far outstrips anything else we have seen – and is couched in the polished elegance one might expect from a twice-nominated Republican Party candidate for US President.
Forbes says that Libra “could take its place alongside the inventions of coins and paper money many centuries ago. It could replace the US dollar as the global currency”. It’s a masterly device, the Aunt Sally, and never tires – stand something up, only to whack it down. And Forbes knows how to whack with subtlety.
The “fundamental importance” of a currency, says Forbes, is stability in value; most cryptos are “useless as real money” because they go up and down like an amphetamine-fuelled yo-yo. “No one in his right mind would write a contract longer than 24 hours in bitcoin…it’s steak one day and dog food the next.” This surely is the biggest flaw in any invented ‘money’ – the lack of certainty about how much a Bitcoin or a Zuckdollar is actually worth. It’s all very well consigning the value of a crypto to a blockchain, but for most people that’s way beyond simple comprehension and therefore innately suspicious, or should be.
Then Forbes moves onto the fatherly advice stage, taking this young whippersnapper, who is just half Steve’s age, under his wing and giving some free wisdom. Make Libra, he writes, “as good as gold. Backing your new money…with a basket of currencies won’t cut it. In today’s monetary system the values of currencies jump up and down, so you won’t get the stability you need.” And while you are at it, call the currency the ‘Mark’, a name which is “up for grabs”.
It’s a very witty piece, neatly placing the stiletto in the heart of the Libra. Back it with real money – gold – and the Libra would “blow bitcoin out of the water”.
Forbes knows in his heart however that this will never happen because Zuckerberg’s “consultants, like most economists today, will be vociferously opposed to the yellow metal, burdened as they are by ignorance and countless myths and superstitions. This widely shared skepticism will actually be an advantage, as it will keep away well-capitalized imitators.” Of course it will never happen. Back this supremely digital creation, the god of the blockchain universe, with something as old as gold? Phooey.
We are delighted that Zuckerberg is too hip for that. Because it means that Glint – which you can download and try here – can carry on bringing Steve Forbes’ sound advice to the world. Glint means gold; gold means money that is stable, independent, trustworthy, global…all the stuff that Libra claims it will be, but cannot ever become.