Well so much for the entry at TAE I was going to post later today! Larry has quite rightly demonstrated the error in Hoppe's analysis. I will only add two points:
1. I think it's pretty unforgivable that Hoppe would make this argument without either being aware of or citing the Selgin article that Larry mentions. Yes, it's not online, but you'd think that if you were going to write an article based on the original Hutt piece, you'd be aware, or try to hunt down, any other Austrian work on that topic. And then to argue that George and Larry hold a view in contrast to Hutt's is the very height (or depths, I guess) of poor scholarship.
2. This free banker also endorses the Hutt argument, as I argued in this piece almost 20 years ago: “A Subjectivist Approach to the Demand for Money,” Journal des Economistes et des Etudes Humaines, 1 (4), December 1990, pp. 459-71.
It's also not online, but I'll try to scan it over the weekend and add it to my online library.