When the other people come up to get a loan, you give them cash/check. You put a marker, a IOU, a ‘loan’ on your books, you then march up to your local Federal Reserve Bank and withdraw the real cash you need, in this example, say 90 dollars. They give it to you, the bank with the ‘loans’ as collateral.
So where does the Federal Reserve get the money? They print it. Sometimes more than the total value of loans and deposit, sometimes less. Usually more.
Excellent! You only have $10 in cash, much less than $100.
You put a marker, a IOU, a ‘loan’ on your books, you then march up to your local Federal Reserve Bank and withdraw the real cash you need
Wait a minute, the bank has $10 in my deposit and they borrow $90 from the Fed to make the $100 loan?
That's a relief, I thought you were going to claim a bank can create money out of thin air and earn interest on all this imaginary money they made.
Borrowing and lending is kind of boring when you explain it properly.