It appears as though, reading some of the Austrian blogs and community forums in the last couple of years, that one of the barriers to understanding the monetary disequilibrium view is the phrase "an excess demand for money." As David Beckworth found out in posting a response to Bob Murphy over at the Mises Blog, many of the commenters over there deny that the phrase "an excess demand for money" is meaningful or simply don't understand what it refers to.
People who have studied monetary economics seriously understand it, as should anyone who was an economics major. Simply put, it means that people's demand to hold real money balances at the current price level is in excess of the supply of such balances. Hence, an excess demand for money.
Given the confusion this phrase generates, I would suggest that we adopt Leland Yeager's way of seeing the issue: it's a comparison between desired money balances and actual money balances. Assuming, and some consumers of Austrian economics appear to deny this is the case, that the demand to hold money balances is not infinite, i.e., there is a determinant amount of wealth people wish to hold in the form of money, this Yeagerian distinction is sensible.
If our actual holdings are greater than our desired holdings, we get rid of the excess by spending on goods, services, and financial assets. This, of course, is how excess supplies of money translate into rising prices: the excess supply of money is spent because it is more than people wish to hold in their balances at the current price level.
When our actual holdings are less than our desired holdings, we will try to acquire additional money balances. The one sure way we have of doing so is to cut back on our spending. (There are other ways, but they are not completely under our control.) The result is downward pressure on prices, which is how deficient supplies of money lead to falling prices (eventually).
Of course the idea that we hold a portion of our wealth as real cash balances was central to Mises's monetary theory. This means that the concept of an "excess demand for money" is not nonsensical in Mises's system. But if that phrase causes too much confusion, I would happily substitute "actual money balances are less than desired money balances."
I would be curious to know if those who, in their confusion, think the idea of an "excess demand for money" is nonsensical see the quoted phrase above as equally nonsensical, and, if so, why.