The Banks have, using the power of fractional reserve banking, expanded the supply of money from 100,000 M-oz. (in the form of Gold) to 7,312,500 M-oz. (in the form of deposit liabilities).

Starting with 100,000 M-oz. of their own gold plus 200,000 M-oz. of depositors gold, The Banks have, created 7,012,500 M-oz. of money out of thin air – simply by making ledger entries in their deposit liabilities.

The 300,000 M-oz. of gold from shareholders and depositors provided 300,000 M-oz. of reserves (M-oz. because The Banks could transfer that gold to depositors). In the end, The Banks owned 940,625 R-oz. of reserves (R-oz. because The Banks could not transfer their reserve accounts to bank depositors).

Next, let's see what The Fed contributed to this process.

The Fed has helped this process along, but it has not (indeed, it could not have) forced it to happen. It confiscated The Banks' gold, expanded bank reserves (the new substitute for gold) by 640,625 R-oz. (940,625 R-oz. ending reserves less 300,000 M-oz. of gold confiscated), and lowered the required reserves from 40% to 5%.

The Banks created all the money, but The Fed facilitated the process by creating excess bank reserves, through its securities purchases, and by lowering the reserve required reserve ratio. In fact, by lowering the required reserve ratio to 5%, they turned most of their influence over to The Banks.