> Anyone creates "money" every time they lend. Banks do a lot of lending, so they're definitely involved. But even opening a bar tab creates "money" (more accurately, "credit").

I believe that's only partially true. If your definition of money is a piece of paper (e.g. a bar tab), than yes anyone can create money. However, if your definition of money is the U.S. dollar (e.g. paper or electronic versions) than there are only two entities that can create it: the federal reserve via open market operations and banks via lending.

My question to digi_owl was whether he was making a distinction of what limits credit creation from banks. The reserve requirement has very little to do with it.[1][2]

[1] http://www.cnbc.com/id/100880857 [2] http://www.cnbc.com/id/100497710

I appreciate the link to the video, I'll check it out.

To expand a bit more, there are many different definitions of money. Here are some measurable ones, roughly defined:

M0 - Currency in Circulation, physical coins and notes in public circulation.

MB - Monetary Base, M0 + physical coins and notes held in bank vaults.

M1 - Money, M0 + checking accounts (excludes bank vaults).

M2 - Money and Close Substitutes, M1 + time deposits (CDs, bonds, etc.)

M3 - Broad Money, M2 + money market funds, repurchase agreements, other wacky shit.

Wikipedia has more detail: https://en.wikipedia.org/wiki/Money_supply

Here's a graph of different monies over time: https://upload.wikimedia.org/wikipedia/en/5/58/MB,_M1_and_M2...

On the other hand, credit is very difficult to measure since people borrow and lend from each other all the time.

Interestingly, M2 is larger now than before the 2008 crash, but money+credit is smaller than it had been.