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RE: People don't understand money. We really should. We really should try to explain it super simply.
This is a great explanation of something I'd heard, and hadn't found the most effective way to reiterate. I believe that's the same structure that's used with mortgage loans - or that in some way a bank is creating debt in an account without having actually paid forward that value elsewhere.
Even more interesting is how it came about!
People used to trade in gold and bigger assets. Gold became too cumbersome so people made banks to keep the gold and trade paper IOU's. Banks realized that people just use the paper, and never come back for the gold, and that they could get away with issuing more paper IOU's than they could fill from their gold supplies. And what you have there is a slippery slope, just look where we are today!
A bank run isn't even about getting back your gold any more, it's about getting back your paper!