[UncleEntity]

Most of the money in existence doesn't actually exist, it is an illusion created through fractional reserve banking.

If the Fed wants to inflate the currency they print more and 'give' it to banks who create even more on top of this and if they want to deflate the currency they can simply change the minimum reserve value so less money is created out of thin air by the banks. Totally oversimplifying here but that's the general idea.

Anything short of 100% reserve banking and you have illusionary money in existence that gets spent just as well as a paper bill but with no actual paper bill backing it.