What a great way to start my first blog post. Let me explain. The exchange rate of the forint to the pound currently stands at about 315. This means no screwing around with subdivisions of the main unit of currency, as the Hungarian equivalents of pennies or cents would be worth about the same as Stanley Matthews in the upcoming transfer window. The smallest coin is 5 forints, and the Hungarian branches of Tesco, a company which seems to be on a mission to open a store in every particle of matter in the known universe, just round your change to the nearest five if you drop an irregular number on an additive-laden lime Calippo. Psychological pricing to entice buyers and increase profit (e.g. 199 forints, 299 forints) even when the customer is going to have to round up what they pay anyway; such is consumer capitalism. But I digress.
I've loved foreign money ever since I was a child. When this interest first reared its head, my mum, bless her, got me some little bags of various national currencies, which I played with for hours, imagining what it would be like to hand these over to a shopkeeper in some far-off land. Sadly some of them are no longer legal tender. My main gripe with the euro is not that it imposes monetary union on a disparate group of states whose economies are not necessarily alike and which need very different parameters to be set (we're seeing the consequences in Greece and Cyprus), but that its advent led to the demise of the franc, the mark, the peseta, the drachma, and so on, which to me takes a lot of the thrill out of travel. As far as the euro is concerned, I'm with UKIP (and if I ever type the three words 'I'm with UKIP' again, you are welcome to try and punch me through the internet). My favourite board game as a child was 'Go', a game from the 60s in which you travelled round the globe collecting souvenirs, in which you had to exchange your money depending on where on the globe you were. There were stylised banknotes of all kinds; orange roubles with backwards Rs, and US dollars adorned with stars, stripes and good ol' Uncle Sam. This is an edge the game has over the famously, money-centred Monopoly, as well as the fact that you can finish it in less time than it takes to wax a gorilla.
So I guess it's fair to say I like strange, exotic monies, which is why I like travelling to Hungary. I've just got back from a trip to Budapest with my wonderful colleagues from Exeter University Jazz Orchestra (available for parties, weddings and bar mitzvahs). A lot of us laughed about the huge denominations of banknotes, and it's true that having a 20,000 forint note in your wallet makes you feel like somewhat of a kingpin, despite the fact that you're wearing a Hawaiian shirt and last night's underwear (this may not apply to everyone). Yet the large numbers at work here have a strange psychological effect on you. A friend saw a lovely 40% silk pashmina in a shop, but balked at paying 3000 forints for it, her first thought being 'that's a bit steep', despite the fact that it cost the equivalent of less than a tenner in UK money. Large amounts of a comparatively worthless currency still have this effect on us, because we in Britain have been conditioned to see 'three grand' as a substantial amount of cash (hilariously, the aforementioned slang term was still used by the British and Aussie staff at the hostel, who told us on our first night that they needed six 'grand' off each of us for tickets to a spa party, which initially felt like being extorted by a mafioso, albeit one with dreadlocks and tattoos in gothic script. Again, conditioning).
And yet the opposite thing happened to me in China, where the exchange rate at the time (2007) was 13 Chinese yuan to the pound. This particular exchange rate occupied a weird twilight zone between forint and pound, between the relatively worthless and the relatively worthful. I basically spent my yuans like play money a lot of the time, a 100 yuan price-tag not being so ridiculously large (as with our Hungarian pashmina) as to discourage purchase. I'd drop a Mao-festooned C-note on a piece of tourist tat, and only when I was walking away triumphantly with a brightly coloured stone before thinking 'bloody hell, that's about eight quid'. Conversely, when I had spent my yuan and was down to US dollars, which are freely accepted in China, and whose value was closer to that of sterling, I was much more circumspect in what I spent them on. Ten bucks for a brightly coloured stone? Pull the other one. (Regarding the yuan and the dollar, the value of the former is actually pegged to that of the latter, which some critics aver is an artificial way to keep American demand for Chinese exports high, but that's a debate far too long and boring for this blog.)
So what's the point of this cod-psychological babble. Nothing really. But there is a serious side to all this. In 2009 North Korea, that paragon of good governance, revalued the won (its currency), so that 1 new won was equivalent to 100 of the old kind. Millions saw their savings wiped out. The psychological effect of hyperinflation can be devastating; Hungary itself saw the most serious hyperinflation ever recorded, the pengo losing value at a devastating rate. Prices rose to dizzying levels, and a worker's monthly pay in March wouldn't be enough to buy a potato in April. How serious was the inflation? Put it this way, in August 1946, my beloved forint was introduced to replace the pengo, at an exchange rate of 400,000,000,000,000,000,000,000,000,000 to 1. That's four to the power of twenty-nine zeroes, or 400 octillion. That's a number for physicists, not economists.
Let me finish with a story. One night outside a nightclub a few years ago a schoolfriend showed me a 100 billion dollar note he'd acquired in Zimbabwe (worth about 50p) at a time when the country was undergoing its own devastating hyperinflation. We both posed with it and made jokes about being billionaires. But of course, being dollar billionaires was no consolation for the poor people in Mugabe's nation, struggling to afford basic necessities with their rapidly devaluing wages. The exchange rate of the forint is as high as it is because the post-Communist government in the 90s made a complete hash of the economy, which led to inflation. So it may be funny to pretend that 20,000 forints is a small fortune, but if there are lots of a currency to the pound, then it's for a reason, and you might want to think about it.
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