Suppose you have some New Zealand dollars () and some other valuable, fungible, relatively divisble items called, say, . If the value of increases, then the value of your portfolio (measured in ) increases.
But the value of increasing is indistinguishable from the value of decreasing, so if you measure the value of your portfolio in , then an increase in the value of appears as a decrease in the value of your portfolio.
So which is correct? Has your portfolio increased in value, or decreased in value? Well, it depends on whether or is more useful to you. But what if they’re equally useful to you? What if is another currency that you use as often as ? Continue reading Hybrid units of wealth (and a surprising guarantee)