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Wait a minute. Did you just admit that MZM or M3 are "money"? Weren't you just telling me that only Fed reserves are "real cash"?

The Fed doesn't control the rate of growth of broader money measures. It does control M1, which isn't moving.

Are you saying the Fed should deliberately *contract* M1, forcing narrow money to go "on special", until broad money growth ceases?

If so, what rate of contraction of the money supply do you think is sufficient to bring that about? Holding it steady for over 3 years straight while prices rise, clearly isn't enough for you. What is?

You only get to direct the M1 variable. If you want to control other things you merely hope will be correlated to your controllable series, fine, but you can only do it by moving the controllable series. So, where do you say M1 should go?

Down 10% a year? That would have given us about the same contraction as the 1929 to 1932 period. Think that is a bright idea, just what you ordered?

Or will you ever admit that the *public*, not the Fed, determines the ratio between savings or CDs they want to hold, and checking or currency they want to hold - not the Fed? Or will you ever admit that the *banks*, not the Fed, determine broader measure money creation, by their lending decisions, quite unconstrained by reserve requirements that only bind M1?

Besides the nonsense about it supposedly being the Fed's doing that MZM is still rising when M1 has stopped, one could interpret your comment as instead a cause for a major change in Fed regulation of banks, rather than a policy recommendation about the direction of the M1 measure they do control. Maybe you just want banks to not be legally allowed to increase broader money measures without proportional Fed directed M1 changes beforehand.

And there we get to my claim that instead of asking the Fed or the government to interfer less, you are instead going to be driven to demanding that the government control private economic actors more. Specifically, more draconian bank regulation and greater restrictions on credit transactions. Which is why I said you will be driven, like other Pauleans, to demanding banks give up their economic liberties. And no meaningful liberties will survive this procedure.

Because all the other non-controlled money measures burgeoned and barged for a reason - that they weren't controlled. Control those ones, and new ones will be invented in their place. Money creation in a broad enough sense is endogenous, driven by private entrepenurial decisions, and not by government anything.

The government can *offer* a money form it *hopes* the market will find more attractive or more useful. But the money form the *market* decides actually *is* more useful, is not up to the government. And draconian regulation of credit transactions will not change that.

The favorite Misesean formula is no issue of fiduciary media without prior commodity cover. Taken literally this would forbid even ordinary checks if those are combined with a clearinghouse system. It would certainly forbid credit cards. And anybody who thinks major money center banks operating 24 hours a day in 50 countries, are going to be prevented from ordinary finance by such things, is nuts. You might drive them offshore and change the legalistic forms a bit. That'd be all.