Here’s an post by one of our users on the principles of money creation.
Under UCC Article § 9-102. DEFINITIONS AND INDEX OF DEFINITIONS
(65) “Promissory note” means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds.
What this means is that the bank does not have to tell you that they (the bank) received your asset (the note) as a sum of money for deposit.
Below is from the Various Federal Reserve Publications FRB
Modern Money Mechanics page 5 FRB CH
If business is active, the banks with excess reserves probably will have opportunities to loan the $9,000. Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000. Reserves are unchanged by the loan transactions. But the deposit credits constitute new additions to the total deposits of the banking system. See illustration 3.
Money, Banking and Monetary Policy FRB Dallas page 11
How Banks Create Money
Banks actually create money when they lend it. Here’s how it works: Most of a bank’s loans are made to its own customers and are deposited in their checking accounts. Because the loan becomes a new deposit, just like a paycheck does, the bank once again holds a small percentage of that new amount in reserve and again lends the remainder to someone else, repeating the money-creation process many times.
Points of interest FRB Chicago Page 7 Banks and Deposit Creation
Banks , offer transaction accounts and make loans by lending deposits . This deposit creation activity, essentially creating money.
Banks create deposits by making loans .
This creation of checking accounts through loans is just as much a deposit as one we might make by pushing a ten dollar bill through the teller’s window .
.
These points to the fact that money was actually created through our signatures.