The money supply is endogenous, that is, the people demanding money via loans are the ones that create their own money. The supply of money is effectively infinite and only limited by regulations, the banks risk assessment of the borrower and the profitability of the business Vs the interest rate.
So there is no market for the interest rate of money that can be created.
If you have a fixed money supply then the interest rate isn't set by supply and demand of funds either but by liquidity preference. As the interest rate falls below liquidity preference people will simply hold cash or keep their money in checking accounts. The interest available for borrowing does not fall all the way to zero. It gets stuck at some positive value. This money is "saved" in the sense of deferred spending but it is not "saved" in the sense that it is not lent out and only available in the future once the loan is repaid, no, it is available today to spend.
The difference between classical and Keynesian economics is effectively that in the former you only have saving and consumption but in Keynesian economics you also have a third state "cash" (including bank account deposits) that is a hybrid of the two. It is neither consumption nor classical saving and this is what's the setting of the interest rate in the open market.
Dieter Suhr effectively argues that this liquidity premium is the effect of money being a social network. Just like Facebook extracting profits from your data, people with cash/deposits benefit from the network effects of money and can sell these network effects for money keeping the interest rate high and if they can't sell them they will try to benefit from them directly (e.g. speculation) as that is more profitable than lending money. Businesses and consumers are the ones creating the network effect so they should be compensated and not the idle who do nothing with their money.
So there is no market for the interest rate of money that can be created.
If you have a fixed money supply then the interest rate isn't set by supply and demand of funds either but by liquidity preference. As the interest rate falls below liquidity preference people will simply hold cash or keep their money in checking accounts. The interest available for borrowing does not fall all the way to zero. It gets stuck at some positive value. This money is "saved" in the sense of deferred spending but it is not "saved" in the sense that it is not lent out and only available in the future once the loan is repaid, no, it is available today to spend.
The difference between classical and Keynesian economics is effectively that in the former you only have saving and consumption but in Keynesian economics you also have a third state "cash" (including bank account deposits) that is a hybrid of the two. It is neither consumption nor classical saving and this is what's the setting of the interest rate in the open market.
Dieter Suhr effectively argues that this liquidity premium is the effect of money being a social network. Just like Facebook extracting profits from your data, people with cash/deposits benefit from the network effects of money and can sell these network effects for money keeping the interest rate high and if they can't sell them they will try to benefit from them directly (e.g. speculation) as that is more profitable than lending money. Businesses and consumers are the ones creating the network effect so they should be compensated and not the idle who do nothing with their money.