> Most of the dollars are only a abstract entry in a database, not a piece of paper. More than that, the "dollars" created by the Fed are really reserve deposi

> Most of the dollars are only a abstract entry in a database, not a piece of paper. More than that, the "dollars" created by the Fed are really reserve deposits which are given to financial institutions who have accounts with the Fed. Those reserves are only useable in the inter-bank system that the Fed runs and cannot enter the 'real' economy. The "money" of the economy is created by private banks through loans out of thin air—no Fed required: > In many market based systems such as the USA, the money supply is essentially privatized and controlled by private banks that compete to create loans which create deposits (money). Contrary to popular opinion, governments in such a system do not directly control the money supply nor do they create most of the money. * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 Most transactions are done with digital transfers by crediting and debiting accounts. Once your loan is approved your account is credited and *poof* money that you can use is created.