How a Bank Creates Money Out of Thin Air

When you take out a loan, the bank doesn't hand you someone else's savings — it creates brand-new money on the spot. Here's the machine underneath the money we all use: how it's really made, why ~90% of U.S. money is just digital deposits, why the "fractional reserve" you were taught no longer applies, what actually limits money creation, and how money quietly gets destroyed again every time a loan is repaid. Educational only — not financial advice. ⏱️ Chapters 0:00 A loan out of thin air 0:47 The middleman myth 1:34 What actually happens 2:32 Where U.S. money lives 2:55 The reserve question 3:29 What really limits it 4:48 How money is destroyed 5:36 Money, not wealth 5:52 What's next Sources: Bank of England, "Money creation in the modern economy" (2014); Federal Reserve (reserve requirements set to 0% on 26 Mar 2020; H.6 Money Stock). Full source log on file. 🔔 Subscribe — new episode weekly, taking money apart one piece at a time. #money #economics #banking #federalreserve #finance #howmoneyworks #inflation #explainer