> Banks don't print money. Federal Banks print the money, which basically means it's the government printing the money. You are confusing two things about mone

> Banks don't print money. Federal Banks print the money, which basically means it's the government printing the money. You are confusing two things about money creation: which entity decides to create the money, and which one carries the book-keeping entry that creates it. In the US system, it is member banks that decide to create a loan. The money that is loaned is some combination of their own deposits, and money lent them by the Federal Reserve. The details of how much money they need to keep on deposit, how much is "their own", and how much the Fed provides are governed by FR rules. So, it is indeed banks that make the individual decision to create money by giving a loan. The FR is merely the book-keeper for that decision and the rule-maker for how the system at large works. Oh, and last, it is the US Treasury that actually prints currency. But we're all talking about the more abstract concept "money".