Episode 3: Yesterday 1, the gene of currency credit trap: Commodity - Token - Commodity

A distant day before yesterday, in ancient times. A tribe by the river was fishing with nets, another tribe in the mountains was setting traps to catch animals, and a tribe on the plains was farming with tools. In order to obtain materials they lacked for better survival, people naturally began to exchange goods. The most primitive method, of course, was bartering, where the main parameters forming the rules of exchange were the labor time, physical exertion, and difficulty in obtaining results. For example, 10 fish could be exchanged for 1 animal skin or 3 baskets of grains. Because fish easily spoil, animal skins are too large, and grains are too heavy, a medium of exchange that is relatively scarce, easy to carry, and easy to count is needed. Historians have long believed that this gave birth to the use of currency for fair exchange. Archaeology has indeed proven that humans used shells and other items as a medium of exchange, or currency, very early on. In fact, from its inception, currency has quietly differentiated into two types: commodity currency, also known as commodity money, and credit currency, which can also be called debt money. Historians and textbooks often emphasize commodity money while selectively ignoring a very important concept, that commodity money and credit money emerged almost simultaneously, but with completely different natures. In other words, from the day it was born, currency may not necessarily have been a fair medium of exchange. The various evils of modern currency stem from the credit trap gene in the genetic sequence of credit currency.
Let's return to the ancient scene once again. In actual commodity trading scenarios, it is more of a "non-simultaneous physical exchange". Lightweight shells or salt, which can be cashed in on the spot or at any time and have intrinsic utility value, can truly be considered commodity money, while delayed redemption of physical items is credit currency, or debt money. In the "non-simultaneous physical exchange" scenario, currency has actually evolved from commodity money into a form of promissory note. The formula of trade is not as textbooks describe it, "physical item - commodity money - physical item," but rather "physical item - token - physical item."
Fish may be caught every day, but hunting animals depends on luck, and rice harvests only occur once or twice a year. Therefore, the currency serving as a medium of exchange among the three, such as shells, usually exists not because of convenience and ease of counting, but rather as a token of "non-simultaneous exchange of goods". Since it is a token, the key lies in credit. However, the credit gene in currency often contains a significant trap. Ancient people were still human, and in the face of the temptation of interests, they would often abandon credit. Currency, which has no practical use value and only serves as a measure of the value of physical items, can easily create such a credit trap. If the hunt fails and animal skins cannot be delivered, the hunters may simply vanish, while those who fail to harvest rice due to natural disasters are left with nothing but a handful of shells, which cannot keep them warm or fill their stomachs. From the perspective of monetary theory, the currency of ancient times, such as shells, can be considered commodity money with an anchoring item, but when the anchoring item is maintained solely by credit, without a more reliable guarantee mechanism, there is inevitably a credit trap.
Fast forward to today, and the above scenario is all too familiar. Under the pretense of the grand modern financial system, credit traps in currency abound. Whether it's the paper bills in hand or the string of numbers representing wealth in bank accounts, they are all entirely credit currency. Driven by human greed and controlled by interest groups, the credit trap genes that have existed since the origin of currency have been continuously strengthened for thousands of years. When a link in the financial interest chain goes awry, the credit trap genes in currency are immediately activated, and the plight of the general public holding currency is no different from that of ancient fishermen.
Pearl standard advocates that only commodity money, especially money with direct use value, can truly provide a sense of security and happiness to humanity. The inevitable outcome of the evolutionary genetics of the credit trap of credit money is that money becomes a plaything controlled by a few individuals or interest groups."

For the complete set and details of the Pearl Standard White Paper, please visit the official Pearl Standard website: www.pearlstandard.org