Edit: So basically we have two explanations. One goes by actual money loaned out again and again by different people and banks, thus “creating” money. The other one: Banks actually loan out money they dont have and never had by creating the same volume as asset.
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If you’re referring to money as physical notes and coins then look up “fractional reserving”.
Basically, bank money is an IOU and mostly are not required to have the physical cash available to settle a mass withdrawal request. Thus money creation can certainly be facilitated by lending money they don’t have. Once the person spends that money, then money is effectively injected into the economy, despite being generated from nothing.
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