I definitely can't defend all of what johnyj has said here, but he is correct about the issue of money creation by banks.

The documentary is correct, up until the point where it talks about the banks themselves issuing credit that isn't backed by deposits. At least, this is if the banks aren't issuing their own currency units which they eventually hold on fractional reserves themselves, but that would essentially be saying that the bank is the Fed or ECB, and these days that's not how people generally think of banks.

Here's how fractional reserve banking really expands the money supply in today's economies.

The central bank (ECB, the Fed, etc.) creates the base money supply. In the case of gold backed specie, this is where the amount of available gold applied towards exchange rather than jewelry or other uses comes in.

This base money supply is "borrowed" from the Fed by anyone from commercial banks to the US Treasury. This is why the "debt as money" phrase came about, since all money is traced back to debt to the Fed. Once these institutions have the money on their books, it is essentially works like any other deposit or form of income since it is a radically rare case that the Fed asks for that money back, except in cases of acting as the lender of last resort (though that serves a different function entirely.)

From this point, the new money is lent out from commercial banks, or it is spent by the US Treasury. The money is now in circulation, and can be spent for any purpose by whoever else holds the funds.

These funds in circulation can either remain physically held, or they can be deposited into another (or the same) bank.

The banks in today's system lends a portion of these deposits out while still holding the original deposits on account. This is now a fractional reserve system, and it has resulted in the expansion of some measures of the money supply. The depositors still have complete access to their money in the bank, while the borrowers have access to all of the funds that they borrowed. This works because depositors in a trusted banking system do not withdraw their funds at a high enough rate to deplete the bank's reserves -- however, under certain crisis circumstances, depositors will withdraw their funds en mass in what's called a bank run, in which case the bank's deposits will eventually be depleted and the bank will become insolvent.

This is the extent of the fractional reserve system. You could go on to include how the borrowed money, once spent, may eventually be deposited into the bank again, but it's really just a recursive function of however many times the exact same process has occurred. There is no expansion of the base money supply, even as the credit markets are expanded 10's, even 100's of times, depending on the reserve rates and the market propensity to deposit into the bank.

This is not fraud. This is not theft. This is not money creation.

This is the bank loaning money from its depositors, and lending it out to its borrowers. If you're in debt then you're running on fractional reserves as well. The bank functions in exactly the same manner, and the way the money supply is altered is also exactly the same.

I hope this helps to clarify the issue.