In my humble opinion, the article is too complex and the topic at hand could be explained in an easier way:
-banks can create money when they issue a loan, because, if all things go well, the created money will create wealth.
-banks cannot create money when they return money to depositors, if they don't have that money, because if they did the created money would not correspond to created wealth.
I.e. fractional reserve banking exists because what can be created with money, i.e. the actual wealth, can come after money is created, and not before: first money is created out of thin air, then that is used to pay people, which create wealth. The old system with the gold standard was limited because it depended on the amount of gold that existed.
-banks can create money when they issue a loan, because, if all things go well, the created money will create wealth.
-banks cannot create money when they return money to depositors, if they don't have that money, because if they did the created money would not correspond to created wealth.
I.e. fractional reserve banking exists because what can be created with money, i.e. the actual wealth, can come after money is created, and not before: first money is created out of thin air, then that is used to pay people, which create wealth. The old system with the gold standard was limited because it depended on the amount of gold that existed.