The creation of the money consists on what money is , explains where it comes from. Part of this explanation is simple. First of all, currency must be printed; some nations use private printers for this purpose, but all U.S. currency is printed by the Bureau of Engraving and Printing in Washington, D.C. .Coins come from the U.S. Mints located in Philadelphia and Denver.

     The ability of banks to lend money opens up a whole new set of possibilities for creating money. For example, when a bank lends someone money, it simply credits that individual’s bank account. The money appears in an account just as it would with a cash deposit. And the owner of the account is free to spend that money as with any positive balance.

     To understand the origins of our money supply then, we must recognize two basic principles, which are;

•  transactions account balances are a large portion of the money supply.
•  banks can create transactions accounts balances by making loans.

     These basics principles examine the process of deposit creation more closely so it determines how banks actually create deposits and what forces might limit the process of deposit creation. Banks’ deposit-creation activities are regulated by the government the most important agency in this regard is the Federal Reserve System. “The Fed” puts limits on the amount of the bank lending. Therefore they control the basic money supply.