The 10$ bill story – what is the value of money

I was listening a few days ago to Tim Ferriss’s podcast.  He was interviewing Seth Godin, I don’t remember exactly on what subject, but Seth told an interesting premise about the value of money.

If a man would come to you, in a bus station, with a note of 10$ (or euro for that matter) and would tell you that he would sell you that note for 1$, what would you do? The story that Seth told was a little bit longer that this and I think the point was another, but this got me thinking.

If someone sells a note of 10$ for 1$ what’s the real value of that note. Is it still 10$ or it is now 1$? At the same time, what is the value of that 1$ bill? Is it still 1$ or it’s 10$? Because we exchanged 10$ for 1$ one of them either increased in value or decreased. But all of this, it’s just economical theory. Because what really matter, it’s what value the owner of that bill attribute to it. (more…)

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