What they mean by that is if there is a newly created bank with no money in it, and you deposit 100 of whatever currency, then I come in and withdraw 80, which I will use to pay for the creation of a bakery. Then I give those money to you, after you have built the bakery for me. Then you go back and deposit those 80 back to the bank. Then the cycle continues: I take out another 80, for example, to pay for initial products, I pay them to Person 3, who deposits them in the bank. The bank just turned 180 into 260. If, at that moment, I, as the bakery owner, decide to refinance my loan, I can get 60 from the bank. If then we get you, with a balance of 160, and Person 3, with a balance of 80, to withdraw their deposits, what do we get? Think about it: the bank only had 100 in its reserves from the initial deposit, and all the other deposits were money that the bank had loaned out, so while you had 100 deposited, then 80, you technically have 180 in your bank account, but there's only 100 actual money in the system.