When you give the bank a $50 deposit, they put it somewhere and importantly, mark $50 on a ledger for your account. The mark in that ledger is a liability for t

When you give the bank a $50 deposit, they put it somewhere and importantly, mark $50 on a ledger for your account. The mark in that ledger is a liability for the bank, it is money they owe you. Say they then use that $50 to buy office paper (it's a small bank). They then owe you $50 and have several thousand pieces of blank paper. The thing you are tripping on is that the deposit doesn't necessarily represent something the bank actually has.