Have you been watching "Money As Debt" .. if not you nailed it! 
http://www.youtube.com/watch?feature=player_detailpage&v=jqvKjsIxT_8#t=1457
It's only the time lag between money's creation and repayment that keeps the entire system from collapsing. Everything said when this video was released applies more than ever right now. Ultimately with fractional reserve debt based compound interest banking you have to have constant 'growth' or inflation of the money supply to keep the interest from overburdening the system. That's why flat growth is so bad and even 3% growth is not enough...
If it wasn't for quantitative easing and the federal reserve openly buying bonds we would have crashed much worse instead we've blown up another bubble.
http://www.youtube.com/watch?feature=player_detailpage&v=jqvKjsIxT_8#t=1457
It's only the time lag between money's creation and repayment that keeps the entire system from collapsing. Everything said when this video was released applies more than ever right now. Ultimately with fractional reserve debt based compound interest banking you have to have constant 'growth' or inflation of the money supply to keep the interest from overburdening the system. That's why flat growth is so bad and even 3% growth is not enough...
If it wasn't for quantitative easing and the federal reserve openly buying bonds we would have crashed much worse instead we've blown up another bubble.