As you say, DJP, this does

As you say, DJP, this does lead to confusion. The comments at this report of the Keen/Krugman debate exemplifies the problem. http://www.debtdeflation.com/blogs/2012/04/21/just-banking-presentation/comment-page-1/#comments Comments by Lyonwiss describes what you say.”If you listen carefully to “Money as Debt” by Paul Grignon or read Hawtrey (Currency and Credit) or Schumpeter (Theory of Economic Development) or Holmes (Operational constraint…), they do not confuse credit with cash (only real form of money M0). For example, a bank deposit is debt (or credit to depositors) , NOT money. That’s why a bank can lend without money, which it typically does not have much of, nor does it create (not cash or notes), any time (@ Koonyeow April 21, 2012 at 9:44 pm). Much of the debate (too much) comes from an abuse of language (confusing debt with money). Leverage and endogenous credit creation are the issues, not money, for which government normally has control…..I think one of the confusions is the words money and deposit. For a private sector worker like me, money usually means the notes and coins you have plus your deposit with (usually) a commercial bank. Generally (but not verified by me yet), notes and coins are created by central banks. Deposits on the other hand come into existence in two ways:1. You hand over your notes or coins to your commercial bank. Your notes or coins decrease but your deposit increases; 2. The commercial bank makes a loan to you. Your deposit increases (and so does your debt). However, no notes or coins are created is this process.When you wrote banks can create money from nothing, the more technical statement is commercial banks can create deposits from nothing if there is no reserve requirement.”