[CraigJPerry]

> You can’t create money without a demand for it first

>> Why not?

To be clear i’m discounting stimulus checks which would be exactly that but it wouldn’t be right to claim this is a common source of money creation.

The most common source would be A commercial bank issues a loan creating new money, but without a customer demanding a loan, there is no ability to create money.

The second most common source would be the government spends into the economy by consuming on its own behalf - there needs to be something for sale in the economy (inc. labour / public sector employment).

[zozbot234]

Usually new money is created when the central bank issues it in exchange for government bonds. It's practically always possible to do this. You could posit a theoretical situation where government bonds are literally indistinguishable from money, but that just means that government bonds are money, so the government treasury has merged into the central bank. Then the central bank has to buy something else, which means it incurs some risk. Or the government can issue more government bonds. "Spending money in the economy" is like this, assuming that the government bonds are permanently rolled over, and never bought back in full.