Nowadays most value/price of goods and services are determined by the supply and demand in the market. And most of the time we use money which back by the credit/trust of the country to exchange these goods and services.
But one thing keep puzzling me. When money first created by the country (let say a new country just form and they start making their own currency/money), without any credit or trust for the newly created currency and any reference whatsoever. How did anyone can determine the price/value for goods using that money. Did the government of the country just announce or set the price for some high demand commodities (say foods/water that everyone needs) as a anchor for everyone to reference? Or did the people just make there own assumption and start a complete chaotic process of natural selection in the market until most of the price settle?
I just can't figure what process did the first country in the past, that created money go through to settle market. It would be very helpful if anyone could give me some insight about this question.