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Commodity money is to be distinguished from representative money, which is a certificate or token which can be exchanged for the underlying commodity, but only by a formal process. A key feature of commodity money is that the value is directly perceived by its users, who recognize the utility or beauty of the tokens as goods in themselves.
A commodity currency is a currency that co-moves with the world prices of primary commodity products, due to these countries' heavy dependency on the export of certain raw materials for income. [1] Commodity currencies are most prevalent in developing countries (eg.
The alternative to a commodity money system is fiat money which is defined by a central bank and government law as legal tender even if it has no intrinsic value. Originally fiat money was paper currency or base metal coinage, but in modern economies it mainly exists as data such as bank balances and records of credit or debit card purchases, [3] and the fraction that exists as notes and coins ...
Because fiat money has "no intrinsic value," when two parties use the same fiat money then the person purchasing the product or service can focus on the time price and ignore the monetary price. [24] For example, if a person makes $5.00 an hour and wants to buy a product that costs $20.00 then the time price will be 4 hours and the actual price ...
Shell money is a medium of exchange similar to coin money and other forms of commodity money, and was once commonly used in many parts of the world. [1] Shell money usually consisted of whole or partial sea shells , often worked into beads or otherwise shaped.
Commodity chemicals (or bulk commodities or bulk chemicals) are a group of chemicals that are made on a very large scale to satisfy global markets. The average prices of commodity chemicals are regularly published in the chemical trade magazines and web sites such as Chemical Week and ICIS .
Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity. [32]
Commodity-based money and commodity markets in a crude early form are believed to have originated in Sumer between 4500 BC and 4000 BC. Sumerians first used clay tokens sealed in a clay vessel, then clay writing tablets to represent the amount—for example, the number of goats, to be delivered.