Pretend that all the fiat money in the world is gone and the whole world is only using Bitcoin.  Ignore scalability issues for this scenario.

I'm sure most of you know that most money is actually created by banks through fractional reserve lending.  Our economy is stimulated by people constantly taking out loans to make purchases.  But with bitcoin you can't loan money that doesn't exist.  Maybe we would have to change our consumerism as a society and prices would drop.  Being able to borrow money easily makes everything rise in price.   What are your thoughts?