Hi Aaron,

Thank you for taking the time to share your thoughts. I will take a look at the paper that you included.

Separately, I am not sure if you read the first two editions in the series. The second discussed that markets assume a context, most obviously that the activities undertaken by the market are legitimate, at least to two counterparties. Why is this important to this article's discussion on fungibility? Because markets do not have a particularly good way of logging 'no' votes for the activities that are taking place. In the prior post I used the example that there is a market for killing people/for hiring a hitman, for example. In other words, sometimes markets support illegitimate activities. So, too, with fungibility. In the article I give the example of clean air being exchanged for a currency - the right to pollute. This is very similar to my postage stamp example. While the value of a postage stamp may be $0.45, to be paid back in money $0.45 instead of in a postage stamp is a net loss, even though the transaction is technically 'agreed upon' and 'fair' from the point of markets. But to replace that postage stamp is a harder thing than is compensated by $0.45. I would argue that clean air and clean water are also not fungible with currency. While an exchange may occur between parties, and the price maybe agreed upon, to create clean air and clean water is actually quite expensive. Couple this with my point in the first article in the series, that markets are imperfect discounting mechanisms, then you had better hope that clean air and clean water are being priced well.

I hope that helps to improve you understanding of my point.

Yours, in service,

Jason