Some 95% (or more) of our (U.S.) money supply is credit, and by no means all of it was created by any central bank.
There have been numerous engines of credit expansion during the mania years – fractional reserve banking, the whittling away of reserve requirements, lack of attention paid to credit-worthiness, securitization, derivatives, the development of the shadow banking system, conflict-of-interest at the ratings agencies, fraud etc.
Credit expansion creates multiple and mutually-exclusive claims to the same pieces of underlying wealth-pie, thereby creating a fictitious wealth that will implode once people realize its existence and reality. Deflation is the chaotic elimination of excess claims to underlying real wealth – the collapse of a money supply that has come to be dominated by ephemeral credit and debt.
At some point we will see investors trying to sell distressed assets, and then we will realize what they are actually worth (i.e. what someone will actually pay for them). When we see that they are worth pennies on the dollar, and that whole asset classes need to be repriced overnight, we will see the reality of deflation. That, almost at a stroke, will mark the destruction of the virtual wealth created during the long expansion years. (Source)