The material value of money can and does diminish to the extent that it comes into use as a medium of exchange and unit of account.
The ideal of economic theory, that money only reflects the value relations realized by exchange, but does not distort them by having a price itself, seemed realizable. The problem, however, is that even and especially the substantially valueless money, precisely because it can be used everywhere and for everything, acquires a new kind of functional value.
The Liquidity of money is an independent quantity that appears alongside values or joins the ranks of values. As a means of exchange, it becomes a store of value. And not only that: it becomes the expression and measure of wealth in general. Money is liquid only because it actually circulates and functions as a universal equivalent, but individually it is very well possible to appropriate it, to hold it in one way or another and thus to demobilize it. The existence of a money market does not change this. After all, the interest rate is not an equilibrium price that brings the supply of and demand for money into balance, but rather a measure of the security needs of the owners of money, which can certainly be influenced by promises of returns, but which cannot be manipulated at will. Closing the money cycle is therefore just as impossible as the money holders' assumption that they can escape circulation is imaginary. Liquidity is a contradictory concept, but nevertheless a monetary reality that drives speculation out of itself for better or for worse.
[…]
~
PAUL, Axel T., 2012. Die Gesellschaft des Geldes: Entwurf einer monetären Theorie der Moderne. 2., erw. Aufl. Wiesbaden: Springer VS. ISBN 978-3-531-17146-3.