It's not a matter of whether investment happens, just whose investment--yours at 2.3%, or theirs at 5%.
Yeah. And if "they" invest your money to trading fractional banking based financial instruments to get that 5%, it is quite certainly rather wasteful as compared to any productive activity such as planting trees, no matter how low the return % in numbers.
If you're getting a 5%
real return, then it doesn't matter how much fractional-reserve banking is involved; it's still a waste to put the money into planting trees at 2.3%. Changes in the money supply just make it much more difficult to determine what the real return is; this impacts the estimated return of the tree investment just as much as everything else. That $1000 you're expecting to sell the tree for in 100 years may be worth less than the $100 you're spending now to plant the tree.
And we come back to the great evil, interest and fractional banking combined. It messes up everything, we can not even measure wealth properly or talk about interest without confusion.
Neither interest nor fractional-reserve banking is
evil. Fraud is evil, and FRB can be fraudulent (even if it is spelled out in the fine print). However, that is not always the case. It is only when people try to manipulate the interest rates, by whatever means--printing money, lowering FRB reserves, demurrage, fraud--that we are prevented from measuring wealth properly. In this money is no different than any other good whose price is being manipulated, save that money is the one good against which everything else is measured, so when its price is manipulated the effects are felt throughout the economy.