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What's $1.00 Really Worth?

I have been thinking lately about the par value of a unit of liquid currency.   In other words, what's a dollar really worth in the United States? 

Given the liquidity and solvency crises which have now gone global, I believe that the par value of a unit of currency, the cold hard stuff, is worth more than face value.  I know it sounds crazy, but there is developing a deep affection for cash.  It grasps the hearts of all stakeholders to the transaction. Cash buyers are revered, and sellers go "ga ga" with discounts for cash-on-the-table transactions. Humans, who are the market makers for money, perceive cash to have special power or value, and this perception is amplified by tight-fisted lenders who make currency more scarce than it probably should be.

I further posit that cash has greater than face value due to a number of options that are embedded within the asset. You can hold it, you can spend it,  and you can invest it. There are just so many things you can do with cash, and you don't have to wait to enjoy these options.  The cash asset is characterized by perfect liquidity, and liquidity or nearness to cash commands different values across asset classes. 

So, you see, a buck is not just a buck anymore...it's more than that.


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