I think it's from three sources. One, the central banks hold...

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    I think it's from three sources. One, the central banks hold cash reserves in vaults and release it to the other banks as and when needed. They do the reverse when they need to tighten. The other is they simply print more money. Finally, they just create virtual money by releasing certificates (IOUs) to the banks saying the central banks will promiss to pay later or cancel them when they need to remove money from the system eventually.

    Just guessing really so someone can correct any of this.
 
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