Analysis of the movement of money forms

Turning to the analysis of Article 128 of the Civil Code of the Russian Federation, we will move away from the fact that the following arises from the economic nature of money: it is not possible to talk about the legal nature of money in general. It is only possible to talk about the legal nature and corresponding legal regime of a concrete type of legal property goods, which carries out the function of money¹⁸⁰

By analysing the table of the forms of money (see table 3), the table of the material and liability content of different forms of money (see table 7) and also the corresponding graphs, it is possible to come to the conclusion there is an evolutionary ousting of one form of money by another more suited to the corresponding level of industrial relations and in contemporary economics literally all types of money exist, having, however, varying degrees of prevalence in economic relations.

Likewise it is necessary to point out, in accordance with M.A. Portnoy, that different forms of money have different abilities to fulfil the functions of money. For example, banknotes are an inadequate means of preserving value (accumulation), nominal credit bills are not quite suitable as a means of circulation, and financial money is inadequate both as a means of circulation and as a means of payment. At the same time, all of these are adequate as a measure of value¹⁸¹.

It is particularly worth noting the following tendencies:

• absolute majority of contemporary money forms are of liability character;
• financial money is at present the most actively developing form of money;
• the development of electronic systems of access to deposited and financial money (e-banking and e-trading systems) allow fund-holders to reduce «inactive» sums of deposited money by means of short term investment in stock and shares, which exerts essential influence on the global liquidity of the international system as a whole.
• абсолютное большинство форм современных денег - обязательственные;
• the spiral development of history exemplifies the fact that mankind, having become acquainted with «portfolio» distribution of stock and shares into different branches of economics for increased stability, has created stable «portfolio» deposited money (SDR, ECU) and even banknotes (EURO);

the development of commercial markets and electronic systems of accessing natural products markets, and likewise the use of the «liquidity line» as a mechanism distinctive to deposited money, in the sector of contracts relating to stocks and shares, allows investment funds to retain an essential part of their assets in exchange traded commodities (ETCs), such as of oil products, light and dark metals and even concentrated orange juice, which again endows commodity money with the function of accumulation (fig. 25).

The signing of international deals, such as, for example, «oil for supply of provisions» between Iraq and the international community, the acquisition of Russian credits by Iraq with oil and oil products; «gifts» in the form of trains full of oil products to government officials of several developing countries — finds us drawing a conclusion that a certain tendency has taken shape, i.e. certain ETCs are acquiring the function of circulation and, consequently, developing into money.

Such ETCs in circulation take the following forms:

• nominal securities in the form of storage receipts, bills of lading;
• bearer securities in the form of bearer storage receipts, bills of lading «upon presentation»;
• «metal» and other commodity accounts, arising as a result of the storage of goods in special depositories. The Canadian company «Kitco» is the best-known of such depositories of precious metals, which gives its clients the right to carry out non-cash operations between themselves. Equally well-known is non-cash circulation of such goods and rights for them on various commodity exchanges in the West, amongst which the Chicago goods exchange and London’s metal exchange stand out for their popularity and volume of trade.

Thus, it is possible to establish that the historical spiral development of forms of money results in all types of existing money advancing to a new level.

At present, forms of money which are of a liability nature, serve the overwhelming majority of deals. Applying to them object/material rules of circulation is not only unacceptable, but also creates huge problems in the circulation of money, and consequently negatively affects the credit-monetary system and the development of economics as a whole.

Many lawyers confirm, that one or another form of money inadequately fulfils one or another function of money. In particular, there is much criticism of the fulfilment of the function of payment by securities. Here we once again emphasise that not one form of money ideally fulfils any one function (table 9).

Fulfilment of the money functions by different forms of money in Russia