Supply and demand curves always shift

In some recent posts (here, here and here) I have discussed the inappropriate application of partial-equilibrium analysis (aka supply-demand analysis) when the conditions under which the ceteris paribus assumption underlying partial-equilibrium analysis are not satisfied. The two examples of inappropriate application of partial equilibrium analysis I have mentioned were: 1) drawing a supply curve of labor and demand curve for labor to explain aggregate unemployment in the economy, and 2) drawing a supply curve of loanable funds and a demand curve for loanable funds to explain the rate of interest. In neither case can one assume that a change in the wage of labor or in the rate of interest can occur without at the same time causing the demand curve and the supply curve to shift from their original position to a new one. Because of the feedback effects from a change in the wage or a change in the rate of interest inevitably cause the demand and supply curves to shift, the standard supply-and-demand analysis breaks down in the face of such feedback effects.

Supply and demand co-equilibrate.  There are no constant returns to scale.  Treating supply as a static does one no good.

The problem Fisher identified was a banker betting time, term of loan.  Currency bankers cannot bet time, they will be unstable. The currency banker has to act like it is dealing with adjustable rates and term loans; asynchronous interest charges applied when loans and deposits are out of balance.   Then currency banking act like efficient supply and demand.

The passage is from Uneasy Money and the author starts with the assumption that central banking work,. Central banking does not work for all the reasons of not making supply and demand curves function for loanable funds. If the currency banker has any function at all, then that function has to be, 'Make supply and demand work in loanable funds'.  That is why I am smarter about this, I never made the assumption that central banking works, i assumed what was necessary for currency banking to work, and the necessary parts do not include central banking.