First, the "own money" in the bank is not technically his money in the bank, but money the bank has borrowed from your friend. So the bank is in debt to your friend.
Now, in order for the bank to be able to be able to pay its debt to your friend one day, bank has assets. I.e. someone has borrowed money from the bank (e.g. mortgage), and those assets can be used/solde to pay your friend if your friend really wants the bank to settle its debts to him.
It kind of is turtles all the way down. Someone needs to be in debt for there to exist any money. Money is a really weird kind of bearer note. It just means that if you have money, you are owed some valuable goods by other people. And you are pretty free to choose who pays that debt to you from them who is willing to take that bearer note from you as a payment.
Note that debt is also how money is born. Technically everything a bank does when it adds for whatever reason money to your bank account is that it increases your balance in the database and boom, we have new money. Of course, usually banks are not stupid, and in order for them to increase their debt to you, they want something from you in exchange. Typically a promise to pay back a bit more some later day.
(As a disclaimer, money is really tricky to think through. So I give no guarantees my thinking is correct, but so far thinking money as a debt has been most useful way for me to understand it.)
I guess I don't see it like that at all. I see it as the olden days where banks (or countries) actually had gold reserves for the amount of money that exists. (I know it doesn't work like that anymore)
I also don't really agree that the bank owes my friend that $100k. They're just holding it for him. If you store your car at my house I'm not in debt to you. Your car is just sitting at my house for a while and you can come and get it whenever you want. It's no skin off my nose, and it doesn't impact me financially, because I'm not in debt to you. In the same way when I put money in my bank account the bank is just agreeing to store my money for a while. They are not in debt to me.
Sure, you owe him a car for the duration, the fact that he can get it whenever he wants doesn't change much. If the car you stored goes missing (and you set up a contract) you'll find you now owe him money.
Another interesting thing is that you (a bank) will typically store not one but a hundred cars, and you will lend 90% of those to other people at any given point, in exchange for money. So everyone thinks their car is stored in a garage and they can get it whenever but they probably can't. The system only works because people don't need their cars that much.
The bank doesn’t store your money, it turns around and lends it to someone else, hoping that the interest it receives on that debt (eg. a mortgage) is greater than the interest it pays you.
While I don’t agree with the overall ‘money is debt’ statement, it is definitely true that you lend your money to the bank. You don’t park it like a car. This is why there can be times that you ask for your money and they don’t have it (the reason for FDIC insurance).
> I also don't really agree that the bank owes my friend that $100k.
I am sorry if I sound blunt, but I do not see this something that is a question of opinion or something one can feasibly agree or disagree with. This is pretty much true by definition.
Yes, I know it feels different if you lend your money to a bank or to your friend, but it is only because you can use the debt of the bank as means of payment more easily.
Are you saying that all money is borrowed from someone?
What if a friend has $100,000 in the bank of his own money, and he pays me $1,000 to fix his car?
He's not in debt, and neither am I. I'm confused