The central bank of the United States, the Federal Reserve produced a document entitled "Modern Money Mechanics” this state’s how to create a money without nothing. The 97% of all the money were created out of dept and that remains in system without a legal bond as the bond is nothing but a printed paper states that as currency. Only 3% of U.S money supply exists in physical currency. This blogs tells you how the U.S government made the 97% money on 3% money. If the United State government is in a need of money it request money from Federal Reserve and the Federal Reserve take a Bond and adds a value to it and give the printed currency, say if 10 billion $. The United State Government runs most of the world’s commercial banks. If a person is need of money he gets money through bank as a loan and deposits in his own account in that bank. The banks reserve is said to be 10% of the money deposited by others remaining 90% is said to be excessive reserve of the bank and that can be used for loans. These in 10 billion $ the banks reserve is only 1 billion $, remaining excessive reserve of 9 billion $ can be used for new loans. And this goes on to 8.1 billion $ and so on till its lacks for the 10% reserve of the bank and the mathematical data says the banks can make 90 billion $ out of original 10 billion $. But the depositors will have all their money in banks only as a digital data. So this is how money created by this fractional reserve banking system.
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