[Boothroid]

If you spoke to a supporter of what you describe they would no doubt point to the extra economic activity created by the new money that would otherwise not be there - if we strictly only lend against deposits this would mean we would all be far poorer than we are now. As long as we all believe in the new money and expect our creditors to pay us back as promised, the sleight of hand works.

That's what a supporter of the current system would say. Personally I think the whole setup stinks and any benefit the average person gets is merely a side effect of a system designed for the benefit of the rich.