They may be cute, but are they fungible? Photo by Jorge Salvador on Unsplash
Fungible is one of my favourite words. Say it slowly. It’s fat and round and juicy. It fills your mouth up and also makes you sound pretty damn smart.
Fungibility is what makes money so useful as a unit of trade, and diamonds and goats less so. If I lend you a $10 note, I don’t care if you give me back a different $10 note later. Nor do I care whether you give me a 10 or two fives. But if I lend you a diamond or a goat, I’m pretty interested in whether you try to slip a different one back to me later, you devious rat.
Technically speaking, fungible things are capable of “mutual substitution”. Other fungible things include shares, precious metals, gasoline and even cans of baked beans (assuming they’re the same brand and product line). That’s why you can take your brand new 150cc lawnmower back to the hardware store and replace it with the same make and model if it proves faulty, but you can’t ask for the latest $10,000 electric ride-on.
It’s also why the old joke about the grandmother and her grandson works. “Would you like a nice, shiny 50c piece?” she asks him. “I’d rather have a horrible, dirty $10 note,” he replies.
Fungible comes from the Latin fungi, meaning to perform. It is not related to fungus, which derives from the Ancient Greek word spongos or – you guessed it – sponge.
I first heard the word years ago when a former GM of one of New Zealand’s largest companies asked me if I knew what it meant. Paul was the antithesis of a modern, slick businessman. He was a short, combative man, who not only didn’t tolerate fools but found them everywhere he looked. He managed to combine those attributes with an urbane charm that would have made him a successful politician if he’d chosen that path. I liked him - a lot - and was also secretly glad that I didn’t have to work with him.
Money people, of whom I often wish I was one, know a lot about the ins and outs of fungibility. For example, they know that gold remains fungible whether it’s in the form of coins or bars. But they also understand that if shaped into the form of a ring or a statue, its fungibility disappears.
Acccording to Investopedia, adding unique numbers to bars of gold may also make them non-fungible. The Federal Reserve Bank of New York, also known as the New York Fed, treats gold bars this way. When storing it on behalf of its customers, it weighs and carefully inspects each bar. The exact bars deposited are the ones returned to customers on withdrawal.
If you’re into cryptocurrencies - yet another thing I know almost nothing about - you’ll be aware that they are also considered fungible. That makes them distinct from non-fungible tokens, or NFTs, which are data files that just happen to be stored on a blockchain, in common with cryptocurrencies.
Because I never really understood NFTs, it made perfect sense to me that the market for them collapsed. I call this Grace’s Law of Ignorance, the principle being that the less you understand something, the more vindicated you will feel if it proves to have been all smoke and mirrors. Unfortunately, this puts me in the same company as those who deny evolution, human-caused climate change and the Holocaust - all things I firmly believe to be real. Here I apply Grace’s Law of Exceptions, the principle being that laws pertaining to how the world works only apply to oneself when they work in one’s favour, and do not apply when they don’t. The collapse of the NFT market demonstrates how perceptive I was to find them suspect. Should climate change prove to be a natural phenomenon, however, I’ll still have been right to ascribe it to human activity because, you know, you can never be 100% sure of everything and the evidence was compelling, wasn’t it, and denialists will have just got lucky this one time.
As for goats, did you know that they’re closely related to antelopes? Both are members of the Bovidae family of cloven-hoofed, ruminant mammals, which also includes cattle, yaks, bison, buffalo and sheep. It’s a family with a wide range of sizes: the gaur can weigh more than 1500 kg, whereas the African royal antelope, an adorably cute creature that surely no one would ever hunt for food, clocks in at a feather-like 3 kg.
A royal antelope. Not fungible, and not quite a mouse either. Photo: Mirko Raner, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=5735452
One of my recent happy discoveries has been goat cheese. Growing up, any time I got near goat anything - milk, cheese or meat - the musky smell was just too much. I don’t know what happened to my nostrils and taste buds, but about two years ago when I braved a soft goat cheese again I was stunned by how delicious it was. Good thing, too. Apparently it’s rich in anti-inflammatory enzymes, probiotics, antioxidants, proteins, and the kind of lipids that keep your metabolism humming.
Not fungible, but very, very edible.
Bits and specious
What drives people to deny the truth? The Guardian has an answer.
If you ever use the phrase whom of which, consider yourself at the forefront of what may be an emerging trend.
Why is it that you cannot not read?
The New York Fed’s gold vault is home to around 507,000 gold bars, with a combined weight of 6,331 tonnes (about half the amount stored in 1973, before the US suspended convertibility of dollars into gold for foreign governments). If you plan to rob the bank, bring the right equipment. The vault is 80 feet below street level and 50 feet below sea level. It also has armed guards.
Royal antelope are actually an important source of bushmeat in Côte d'Ivoire.
Quote of the week
I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.
Steve Martin