"And it is for this reason that although banks don’t need your money, they do want your money. As noted above, banks lend first and look for reserves later, but they do look for the reserves."
No, banks are allowed to loan more money than they have in reserves (they are allowed to have a fraction of a loan in their reserves = fractional reserve banking).
Client A = 100 dollars
client B = 0 dollars
Bank passive = 100 dollars
bank actives = 100
client b makes a loan of 70 dollars
client A = 100 dollars
client B = 70 dollars
Bank passives = 170
bank actives = 170
Now client C needs a 100 dollars loan.
100 < 170.
Bank actives 270
bank passives 270
…
In the simple savings-and-loan case, banks loan from their deposits. So technically it is the bank's available capital, but the capital belongs to someone else. If the bank has $1 million in deposits, it might decide it can safely loan out $100k, which in some sense increases the money supply.
No. Or maybe in really rare cases. One man savings are really another man debt. In reality, actors that can roll their debt do so (so states and companies with enough capital as collateral), allowing common men to have savings.