1) Chase doesn't have to show you $0, you'll still see $100.
2) When you decide to spend the money, chances are the seller is also with Chase, then all Chase has to do is show you $0 and the seller +$100
3) If the seller happens to be with another bank, Chase will just go in credit with that other bank for $100. The total of such interbank accounts is around 0 as money flows both ways, and, with a decent margin, within the bank reserve amount.
Fractional-reserve banking works so well with so little "actual" reserve money that some consider it counterfeiting.
1) Chase doesn't have to show you $0, you'll still see $100.
2) When you decide to spend the money, chances are the seller is also with Chase, then all Chase has to do is show you $0 and the seller +$100
3) If the seller happens to be with another bank, Chase will just go in credit with that other bank for $100. The total of such interbank accounts is around 0 as money flows both ways, and, with a decent margin, within the bank reserve amount.
Fractional-reserve banking works so well with so little "actual" reserve money that some consider it counterfeiting.