1: The stated purpose of the Book: "Introduction: The purpose of this booklet is to describe the basic process of money creation in a "fractional reserve" banking system.?"

3. Nature of USD defined: "Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries." "money used in transactions is mainly of three kinds - currency (paper money and coins in the pockets and purses of the public); demand deposits (non-interest bearing checking accounts in banks); and other checkable deposits, such as negotiable order of withdrawal (NOW) accounts, at all depository institutions, including commercial and savings banks, savings and loan associations, and credit unions." "In the remainder of this booklet, "money" means M1"

2. Surprises in definition of money supply: "However, only the cash and balances held by the nonbank 

public are counted in the money supply. Deposits of the U.S. Treasury, depository institutions, foreign banks and official institutions, as well as vault cash in depository institutions are excluded."

This means that none of the USD the government "has" in their accounts at the Treasury is counted; none of the "reserves" the member banks carry and borrow from each other, nor the banks which have accounts with each other. If the FED does a currency swap (We'll owe you Euros if you owe us dollars) equivalent to 16 trillion dollars with the ECB -- This does not increase the money supply!

4. Definition of "value": "it is the confidence people have that they will be able to exchange such money for other 

financial assets and for real goods and services whenever they choose to do so."

5. Admission of relationship of qty & purchasing power: "Money, like anything else, derives its value from its scarcity in relation to its usefulness. "Commodities or services are more or less valuable because there are more or less of them relative to the amounts people want." "Control of the quantity of money is essential if its value is to be kept stable"

6. Banks create it: "Who Creates Money? Changes in the quantity of money may originate with actions of the Federal Reserve System (the central bank), depository institutions (principally commercial banks), or the public. The major control, however, rests with the central bank. The actual process of money creation takes place primarily in banks."

"Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money."

"What Limits the Amount of Money Banks Can Create?"

7. Loaning creates: " money...increase when ...proceeds of loans made by the banks are credited to borrowers' accounts."

8. Nothing new about it: "This unique attribute of the banking business was discovered many centuries ago."

9. FED Central NY creates thru purchase of securities: "Let us assume that expansion in the money stock is desired by the Federal Reserve to achieve its policy objectives. One way the central bank can initiate such an expansion is through purchases of securities in the open market. Payment for the securities adds to bank reserves. Such purchases (and sales) are called "open market operations.""

"Bank A's reserve account at the Federal Reserve is credited for the amount of the securities purchase. The Federal Reserve System has added $10,000 of securities to its assets, which it has paid for, in effect, by creating a liability
on itself in the form of bank reserve balances. These reserves on Bank A's books are matched by $10,000 of the dealer's deposits that did not exist before."