Thanks - your Chicago quote says exactly what I told you. The $100 you deposited was not put in a special box called "freetx money" it was added to the funds of the bank. The $20 you withdrew was not taken from a box called "freetx money" it comes from the banks funds.
I never even implied that was the case. You are largely off on a tangent agruging against yourself on that.
So if I go to that bank and borrow $100, I am not borrowing your money. I am entering a contract to make payments in return for access to cash that comes from the banks funds. Or as they so elegantly put it "What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers transaction accounts..."
The funny thing is that we both already know this. I'm not sure what point you want to make.
It doesn't come from "bank funds" and that is the whole reason why Fractional Reserve banking leads to money supply creation. When you sign you name on the dotted line, that new $100 is created into existence. Its known as "balance sheet expansion" as a nice name, but in reality its just money printing.
This is really elemental stuff. Maybe you should take a look at this wikipedia page as it gives a basic overview of how the money creation process works (
http://en.wikipedia.org/wiki/Fractional-reserve_banking#Money_creation)