Um, okay...this is a straightforward explanation of how the monetary system actually works in practice. Do you have a better explanation? Historically, all currencies used to be exchangeable for a static mass/weight in gold. Money markets didn't exist in the form they do now. Now if you want to trade your paper currency in for gold, you have to deposit it in a trading account (i.e. convert it to its electronic value equivalent) and make a transaction on the variable commodity market.
This may feel all natural to you and I, since we've never known anything else, but the truth of the matter is, money has value today only because we say it does through our use of it to exchange goods and services.
It is a fact that the phenomenon of interest bearing debt means that there is always more debt than money in the world. If you have paid off all of your debt, that simply means that somebody somewhere else has more debt than before, because the banks are using the money in your account as a basis to create more money to supply loans to somebody else, who is paying interest on top of the newly created money.
Why do you think the great depression was so devastating? Massive stock market failure caused panic and a mad rush for real paper currency caused banks to fail because they didn't actually have it, etc.
If we lose confidence in the currency, its value drops like a stone. If everyone tried to go to their bank and withdraw all of their savings in real paper currency simultaneously, the world's monetary based economy would literally implode overnight.
This coming from an accounting and finance professional. It's what I do for a living.
PS my first job was in Minneapolis at Larson Allen LLP right downtown