If you manufacture too much of something, its perceived value drops, and vice versa if you don't create enough. Same applies with money.
I am not following the context of this discussion, but the above bolded is incorrect.
The Quantity Theory Of Money is incorrect.
The value of money is dictated by public confidence.You can quantify that.
There are 2 independent monetary systems, say fiat and X.
Value is inflowing into X, therefore you can state that confidence is leaving the fiat system and entering the X system (bull market anyone?)
The same is true in the opposite direction, value is leaving X and flowing into fiat thus reduced confidence in X (bear market).
It's as simple as that and simple is king.
Although I would argue that public confidence rarely comes into it anymore, especially with fiat.
Furthermore to your statement, the value of a commodity is also dictated by public confidence.
The latest Samsung phone is case in point....everyone wanted them and was willing to pay for them. They started blowing up, thus confidence dropped, now they are worth nothing.
There are a lot of parallels between commodity & currency when you keep the economic parameters simple.