Except that your chart is nonsense.
In your view, the stuff that is not used as money is money, while the stuff that is used as money is not money. If we agreed to accept your contorted view, you would be right, but then there would be no point in the discussion, because no one gives a fuck about not-money.
Your chart also suffers from the flaw that you are reading it from the top to the bottom, when reality happens from the bottom up. Lending happens first. Reserves are found later, usually by borrowing against the new note.
Money creation is not a secret, just there are two different types. I'm more interested in the central bank money, but other people might be interested in checkbook money, check
http://en.wikipedia.org/wiki/Money_creationFRB is the practice of creating checkbook money, but if FRB is not allowed, then there will be no checkbook money, but there will still be central bank money. and if central bank money is not available, the checkbook money can not increase if commercial banks already loaned out to maximum
FED is buying 85 billion USD bonds and MBS monthly, that money is not generated by FRB, and that is the money might create 850 billion of checkbook money if loaned out by commercial banks later