"Gold and silver make money, but money doesn't make gold and silver." Is this sentence correct? Why?

Gold and silver make money, but money doesn't make gold and silver.

Interpretation and analysis:

1. "Gold and silver are essentially money" means that gold and silver were just ordinary commodities when they first appeared on the market. When the equivalent is fixed on gold and silver, gold and silver naturally become money.

2. "Money is not born with gold and silver" means that gold and silver are born with the property of acting as money. It has the advantages of small size, great value, portability, long-term preservation, uniform texture and easy division. But in the later period, in order to be more convenient and meet the above conditions, paper money was invented. Paper money is different from gold and silver, so money is not born with gold and silver.

Extended data:

The contractual nature of money determines that it can have different forms of expression, such as universal equivalent, precious metal currency, paper money, electronic money and so on. It can be used as a trading medium, storage value, deferred payment standard and accounting unit.

Physical currency is a special commodity that acts as an equivalent in the exchange of goods and services, and it is a material appendage and symbol appendage of people's commodity value. It includes not only currency in circulation, especially legal tender, but also various savings deposits. In the modern economic field, only a small part of the currency field is displayed in the form of physical currency, that is, practical paper money or coins, and most transactions use checks or electronic money.

Currency area refers to a country or region that circulates and uses a single currency. It is necessary to introduce the concept of exchange rate when different currency areas exchange currencies with each other. In modern economy, money plays a fundamental role. In macroeconomics, money refers not only to cash, but also to cash plus some tangible and intangible assets.