INDIVIDUAL - CURRENCY AND PARITY VALUE

The Currency

Independent currency is a powerful symbol of sovereignty. It comes in different denominations, each different in looks, dimensions and security features. Differences aside, each one carries a statement of promise lending it credibility and making it legal tender, an instrument for value transfer and a medium of exchange. But there is a catch about the value “assured” to be transferred.

Face Value

Each note carries a promise that assures value at par with the printed face value. The value, said to be guaranteed with commensurate gold reserves, keeps fluctuating based on supply and demand, interest rates, inflation, public debt, and other macro and micro factors. Socio - political environment, itself speculative and make believe nowadays, influences currency value. Experienced as, purchasing power parity and expressed as exchange rates, a strong currency may equal many of a weaker currency.

Transaction an Imperative

Inflation weakens currencies, erodes value guarantees of a currency and forces it to deliver much below par its face value. Weak or strong, a currency realises its value only when transacted. Each time, a note changes hands, it imparts the denomination value to the service or transaction without itself being consumed. Thus, ten transactions, of a single ₹100 note, add ‘thousand rupees’ value yet retains only its face value before, through and after transaction. Though small denominations have high turnover, high denominations make up even with small movements. A ₹10 note toils two hundred times to achieve what a ₹2000 note does in one transaction. Unfortunately, bigger denominations tend to get hoarded more!

Believe it or not; we have much in common with currency notes!  

Let’s Face It

We all, to start with, have a face value! Based on how others perceive our looks, cast, colour, creed or being a member of a family, an organisation, society or nation they arbitrarily assign us a notional value. We could even maneuver ourselves into positions of authority and responsibility using this bias.  But for those who aren’t worthy enough, inflation catches up and exposes the difference between ego and worth. Our competencies dictate our denomination and consistency of our actions and its conformity with our claims determine our exchange rate values. Our antecedents, which reach places before us, like reserve bank promises, create expectations. Meeting expectations result in improving value and failure to do so leads to credibility-erosion, an inflation of sorts. 

Parity

Parity is a major issue with us. Many, significantly visible contribute insignificant little, whereas few insignificantly visible contribute significantly.  They are everywhere. We have the choice of deciding to commit or not commit ourselves to action and even choose how much to commit. We often choose to contribute just the minimum required and hoard and resist deploying our real strengths.

Doing so, we are devaluing ourselves. When it becomes known, we are no more required. We would be like demonetised notes! 

Comparisons

When currency loses value, government intervenes in an attempt to shore it up. Human relationships are no different. Though we exercise long-term patience in the case of currency, hoping a turn-around, we seldom afford this luxury even to intimate interpersonal relationships. Interpersonal problems emerge mostly from judgmental comparison between ‘expected’ and ‘received’ and lack of required interventions.

Broken relationships are manifestations of impatience and inability to invest long term in relationships. Society is littered with broken relationships and courtrooms are brimming over. Falling short on assurances is natural but not accepting the likelihood of falling short is the problem. Unfortunately, unilaterally or are led by other’s projections, we set high standards for others to meet while we are satisfied delivering sub-par.

Takeaways

Like currency notes, all of us, have face values. Real or unreal, it is up to us to live at par, over-par or sub-par. Inaction to avoid risks is hoarding and can lead to devaluation. Unpredictability or volatility will result us being dumped like demonetised notes.

The more one commits and acts, better the velocity of turnover and higher the chances of carrying over accumulated credits. Comparison with others help to upgrade or intensify inputs but if used for anything else may lead to terrible depreciation. Finally, it’s about actions at micro levels conforming to the macro values, our value systems.