This is important. The Federal Reserve Bank of Chicago states that the Legal Tender nor Bank Credit are Commodity Money. More importantly, Bank Credit is merely a book entry. Again, Bank Credit is only a book entry. It does not exist.
"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was every invented."
[Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920's, speaking at the University of Texas]
"The bank hath benefit of interest on all moneys which it creates out of nothing."
[William Paterson, founder of the Bank of England in 1694, then a privately owned bank.]
"The modern banking system manufactures money out of nothing. The process is, perhaps, the most astounding piece of sleight of hand that was ever invented. Banks can in fact inflate, mint and un-mint the modern ledger-entry currency."
"Neither paper currency nor deposits have value as commodities, intrinsically, a 'dollar' bill is just a piece of paper. Deposits are merely book entries."
[Modern Money Mechanics Workbook, Federal Reserve Bank of Chicago, 1975]
This is important. The Federal Reserve Bank of Chicago states that the Legal Tender nor Bank Credit are Commodity Money. More importantly, Bank Credit is merely a book entry. Again, Bank Credit is only a book entry. It does not exist.
"Deposits are created whenever a bank credits a current account. Indeed, crediting is done 'out of thin air'. At the moment when it is carried out, it has no operational prerequisite except having obtained a banking license which in fact is a license to print money. Banks' money printing, though, is not unconditional. One condition is that banks extend their balance sheets largely in step with each other so that the flows of deposits and central-bank reserves, residually also cash, from and to single banks do not result in major imbalances."
[Modern Money Theory and New Currency Theory. A comparative discussion, including an assessment of their relevance to monetary reform retrieved 2016-03-24 http://www.paecon.net/PAEReview/issue66/Huber66.pdf]
"However, it is the private banks that do by far the most of the money creation. They are the ones lending, after all, and they lend freshly created 'credit'."
[Real Currencies. https://realcurrencies.wordpress.com/2013/07/15/does-rothschild-own-all-central-banks/]