Ah, I think I understand you now. Yes, if you have very close substitutes, making one less desirable will just push people into holding more of the others and not much less of the aggregate.

This is certainly a problem for physical cash vs. reserves with the fed, though less than it seems, I think because the return on cash has to take into account storage and security costs.

People also sometimes think that this applies to holding cash vs short term government debt, but government debt isn't a medium of exchange, which makes it not a very close substitute for money.

English's reference system leaves a lot to be desired.

Sorry, I meant

If the Market Monetarists mean to say that they oppose the Fed doing things that in effect amount to subsidizing holding money then I tend to agree.