Secondly, money is the carrier of national credit. National credit covers a wide range, and we look at it from three basic aspects:
1. The controllable substantial wealth of a sovereign country, that is, the existing wealth that has been realized and can be recognized by other countries. Such as commodities, industrial products and so on. Drugs produced by the state and products not traded internationally are not tradable wealth; In other words, not all countries' wealth can be exchanged internationally, such as land and most land-based real estate (unless the country opens its land and real estate market to the outside world).
2. Sovereign countries are recognized as wealth that can be generated in the future, and the market value of shares of similar companies is more about investors' understanding of the company's future wealth creation; MMT embodies this value more.
3. Credible value in currency transactions, that is, the current price of currency exchange in the international market. Although it is a price, the real-time price of this currency can be cashed in real time, that is, the transaction determines the price. Russia controls the international trade of its oil, natural gas, grain and other commodities, and forcibly links the rupee with its physical commodities, thus preventing the Russian rupee from being "transaction-priced".
Thirdly, there are two kinds of currency prices in reality, namely domestic currency price and international price (such as offshore RMB). This is an essential feature of sovereign currency, that is, domestic transactions, that is, wealth preservation, and international transactions of currency. The dollar does not distinguish between domestic prices and international prices, which is hegemony, because I can't actually buy a lot of wealth in the United States with dollars. The close relationship between the two is actually related to the openness of the country. The more open, the more similar the two prices are.
What is worth noting is the "transaction pricing" of currency. The dollar has such a great demand for trading commodities and financial futures, so the dollar is actually divorced from the sovereign wealth of the United States (reality and future). It can be said that the value of the dollar is based on the "faith" of the transaction. As a kind of "commodity", the biggest difference between sovereign currency and commodity is that currency trading can realize "value realization" in real time, so the pricing of currency is more "transaction pricing" in the real market (the international trading volume of financial markets such as currency and futures far exceeds the trading volume of commodities); Conversely, the currency that is priced in the transaction affects the distribution of a large amount of wealth.