I want to posit the idea that by demanding lawful money, a new kind of fractional currency is created.

I've been thinking of US notes as a non-elastic and un-fractionalized currency, and that's true, since US notes are limited to $300 million.

But think about this: if suddenly 1,000,000 people decided to demand lawful money when they deposited their paychecks, presumably more the $500 million in lawful money would instantly be created.

This demonstrates that demanding lawful money does not result in being issued US notes. Rather, US money on account becomes available, and can be spent into the economy.

Any thoughts?