Bitcoin Forum

I understand that all money enters the economy through loans. So, a deposit and loan asset are created (on a computer) when someone takes out a loan. If someone wants to take out $500 cash from their deposited money, how does the bank transfer computer money to real money?

Uh, no, that's not correct.

As with 99.99% of all questions asked, Google has the answers: https://www.google.com/search?q=how+does+money+get+into+the+economy&ie=utf-8&oe=utf-8

I'm pretty sure that is correct? What is your understanding? Are you confusing the creation of central bank reserves with money actually entering the economy? They are two different things.

Those links do not answer my question.

For fiat to enter the economy, it's printed by the central bank and given away to other banks for less than nothing. Yeah, so free cash for the big banks who them lend it to business and people. This is known as Quantitative easing (QE)

I am asking how physical cash specifically enters the economy, not fiat as a whole.

Anyone know?

Yes, follow any number of the links I provided in the google search.

Try this link.  Treasury prints and Federal Reserve Banks distribute.

http://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html

if you are talking about the fact that banks use your deposited money to make investment and then if you need your money back, how can they give them back, then they just give your money by taking them from another deposit and so on

Banks typically have a cash reserve. So when you take out $500, they pay it out from that.
Lots of businesses deposit cash - think fuel pumps, toll collectors, restaurants. So banks typically churn this around.
On an overall basis, central banks print physical cash and this flows to banks and then to the economy.

Central banks print it. Most money is actually created by regular banks through loans like you said but most of the money only exists digitally on a computer. If everyone tried to withdraw all their cash the economy would be screwed because there's simply just not enough physical cash by many multiples.

No the Treasury prints the notes.  The Central Bank distributes it.  Member banks have an account at the Federal Reserve banks

Your understanding is terrible. Watch an educational video.

https://www.youtube.com/watch?v=94BtOtGVqLw

I have no problem w that video but the OP is right.  Modern money is mostly created from loans

Essentially it boils down to what money supply you are talking about - M0 or M2.
M2 primarily increases through banks making loans.
M0 increases due to printing of money, which then makes its way into the economy.

It depends on what country your refer, in US the federal reserve prints they money and distributes it to the banks and from the banks you just cash  it out with you debit card etc.

OP is asking about notes. Treasury prints the notes.  Fed "prints" by expanding banks balance sheet.  The money Fed prints is reserves (M0)

Correct.  OP was asking about notes I think

IIRC only about 10% of all America dollars are actually physical, the rest are numbers in a ledger (so essentially like bitcoin); not sure about other nations, but it's probably a similar scheme.  The physically printed money is produced by mints paid for via taxes and distributed to banks in armored vehicles protected by well armed and armored guards (used to know a guy who did this stuff, he got paid handsomely); to attempt to rob them will pretty much be the end of your life, either literally or through a lifelong prison sentence.  The physical notes then get passed on via bank withdrawals e.g. from an ATM, which then proceed to circulate into and out of businesses, say, when you make a purchase, and when you get change back from your purchases, and also from trading between other folks.  This is done every so often since the bank notes aren't all that durable, they get worn out or torn over time.

For everything else, check out Mike Maloney's video on how money goes from digital to physical--it's needlessly complicated, not the video but the system itself, but it is what it is. https://www.youtube.com/watch?v=iFDe5kUUyT0

Oh I apologize for that, I'm not really experienced in the US notes system.