Here is a video that describes how money is created. It is the Bank of England but it applies to basically any of the modern banking system.

Money creation video

One quote: "Loans make deposits, not the other way around". So money is created new at the time the loan is created. Then the new money freshly created from the new loan is deposited in that same bank. The bank creates the money for the deposit.

If I have said something correct in any of my postings, please feel free to correct me. You will not hurt my feelings. If I say something that is incorrect I sure do not want to be spreading misinformation, as well as I do not want to be misinformed myself.

Iowegian knows his stuff concerning banking. Take his word over mine. I'm just a dirt farmer trying to understand all in the banking mess that is going on.

John