The importance of monetary credit

Money is essentially a measure of value, and its basic function is a medium of exchange and a means of value storage, which should be the most basic understanding of money.

From the physical currency of a specific commodity for thousands of years to the national credit currency corresponding to the social wealth within the scope of national sovereignty as a whole, it has been transformed into a pure value unit or value scale and become a digital symbol, realizing the sublimation of the currency "breaking the cocoon into a butterfly"-paper money or paper money, but from the metal-based paper money to the national credit paper money, there have been internal changes.

The so-called "credit" of credit currency here is not the credit of the institution issuing money (such as the central bank) itself, nor the credit of the government or finance itself, but the credit of the whole country (supported by the social wealth of the whole country). It is the state that gives the monetary authorities the right to issue money. Therefore, the currency issued by the central bank is not the debt of the central bank, and the central bank has no commitment to pay any property to the currency holders at all; Money is not supported by government taxes, and taxes simply cannot support the whole money; Government credit can only support government debt, but not the whole monetary aggregate.

The emergence of credit currency is an inevitable choice for the development of money, but the transformation of money from natural physical currency to national credit currency is realized imperceptibly, and the principle and logic of its profound fission seem to have not been paid enough attention.