How Do Banks Actually Create Money?

Imagine you have a piggy bank, and when you put money in it, the bank gives you more. That’s how banks create money! When someone takes out a loan, like for a new bike or house, the bank just writes that money into existence, kind of like magic.

When a person borrows money from a bank, the bank doesn’t take it from somewhere else. It just creates it by adding numbers to its books. That’s how money is born in the real world, through loans and banking tricks.