First of all, I've been a little wrong. The amount of money maximally created out of thin air would be 9 times the amount of the deposit, not 8.
The multiplier, including the initial deposit, would be 1/reserve requirement. In our case with 10% it would be 1/0,1 = 10. Or a nine-fold of the initial deposit out of thin air.
No. That would only be the case, if all the physical bank notes and coins would be deposited in sight deposit accounts and all but the reserve would be lent out and so on and so forth. This multiplier only shows you the maximum amount of money created by commercial banks would be (1-reserve rate)/reserve rate times the amount of cash. However, the real multiplier is also determined by other factors. Not all of the cash is deposited. Even if everybody wanted to deposit all the cash, it's not necessarily the case, that there is demand for such a huge amount of loans, nor willingness to lend out so many loans (as is currently the case). In this case banks wouldn't even let everybody deposit their cash, or at least there wouldn't be any interest on those deposits.
Currently, according to those graphs:
the real multiplier is actually smaller than 1. The money base, M0 (money created by the central bank, or cash and bank reserves at the Fed) exceeds M1 (cash and sight deposits). I just realized that this is the case since late 2009 and it
really surprised me. What that means, if I'm not totally wrong here, is that the amount of reserves the commercial banks hold at the Fed exceeds the amount of cash deposits, since cash is part of M0 and M1. That's really amazing. For the last 2-3 years if the Fed increased M0 by X, the amount of money in circulation (M1) increased by less than X.
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