how is one currency more powerful than another? If you exchange $100 to 102 francs don’t you still have $100 but in francs?
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Imagine you bought $100 of bananas. Sure… at that point, you own $100 worth of bananas.
Now imagine that just after you do that, the banana countries announce that they are going to war, that banana tax is going up, or that there’s been a bad drought in the country.
Now you still have bananas but they could be worth a lot more or a lot less almost instantly. Converting them back at that point won’t get you $100 but another number.
The value of a currency is tied to the actions of the banks and countries using it. Zimbabwe’s currency became worthless almost overnight. A country’s inflation can literally explode like that. Countries can “print” more money… so if you have $100 and the US decided to print several trillion dollars tomorrow, do you believe that everyone will just accept that the US is worth several trillion dollars more today than yesterday even if nothing else changed? No. All you’ve done is “divided” the value of the currency into smaller units because you have more “pieces” of it now. That $100 has the buying power of, say, $10 now. You can’t just print money and expect the world to honour it at its full value forever, no matter how many times you print more. It’s not monopoly money.
The values of currency vary in themselves, against every other currency, and against every commodity that you could buy with them, all the time. Literally each second it changes. Your money is in Russian currency? Russia goes to war. Russia’s customers refuse to pay in Russian currency because they think it’s worthless to them now as only Russia can dictate how you spend it in large volumes. Now all your investments in Russian currencies are worthless. It literally just happened like that.
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