Between money as a standard of value and money as a standard of prices the substantial differences exist. Money as a standard of value relates to all the other goods, it appears spontaneously, changes in accordance with the quantity of social labor spent on money commodity production. Money as a standard of prices is specified by the State and acts as fixed weighted quantity of metal changing with the cost of this metal.

Initially the weight content of the monetary unit coincided with the standard of prices what reflected in the names of some monetary units. Thus in past the English pounds sterling really and truly weighted one pound of silver. During the gold circulation the standard of prices supposed the monetary unit determination equal to the definite quantity of gold. In the USA in 1900 one dollar was equal to 1.50463 g. of pure gold but during the following devaluations of dollar the content of gold fell triply: in 1934 to 0.889 g., in December of 1971 to 0.818 g. and in February of1973 to 0.737 g. In the course of historical development the standard of prices separated from the weight content of monetary unit.

The Jamaican currency system introduced in 1976 till 1978 canceled an official price on gold and the gold parities as a result of which the official standard of prices became irrelevant. Gold was drove out of circulation by inconvertible credit money. At present time the official standard of prices changed on actual which forms spontaneously in the process of market exchange.

During the inconvertible credit money circulation the price confirms in the goods directly but not in gold. That’s why the price is the form of appearance of exchange ratio of the good to all the goods but not to the yellow metal specifically.

At present time paper money performs the function of standard of value without any gold guarantee but not less successfully then precious metals.

Money as an instrument of circulation. Money was born by trade and appeared as a technical mean which facilitates the goods’ exchange. Because without money only the direct exchange could be done when each of partner has a required good for another partner. But even there will be three people they can fail the deal if won’t use money. In other words money facilitate greatly the transition (or, as economists say, «circulation») of goods between the trade participants. Money serves as a universal language which helps sellers and buyers to come to agreement.

By the way that’s exactly why gold and silver became the main money commodities which contained the basis of the World’s leading countries’ monetary systems till the middle of the last century. These precious metals were admitted by the majority of nations all over the World as the most recognized monetary language which facilitated greatly as internal and international trade.

During the direct commodity exchange (G-G – good for good) the purchase and sale happened simultaneously in one place without any gaps. The commodity circulation (G1-M-G2) consists of two independent actions separated in time and place. Money plays the role of representative which allows to overpass the temporal and spatial gaps and to provide continuous process flow.

To money peculiarities as a mean of circulation first of all we can include the real money appearance in circulation and its evanescence in exchange. In this connection the token money – paper and credit – can perform the velocity function. Here the parallel countermotion of money and goods happens when money is tied to the goods movement. Historically this function generated token (paper) money.