Consider three positions:
1. The stock of money is determined by the demand for money, and not by the supply of money.
2. The stock of money is determined both by the demand for money and by the supply of money.
3. The stock of money is determined by the supply of money, and not by the demand for money.
In my last post, I showed that the first (demand only) position was wrong. The central bank's supply function matters too.
Most reasonable economists, who understand the distinction between supply (function or curve) and quantity supplied, who understand that the interest rate target is endogenous with respect to the stock of money, if inflation is to be kept on target, will say that the second position (both demand and supply) is the sensible position to take (unless the central bank has a perfectly inelastic supply function).
But I now want to argue for a more extreme position. I now want to advance deep into enemy territory.