Real money is money that is either in the form of a valuable material (such as gold, silver, etc) or money that is backed up by some sort of real collateral. Most of the money now in circulation is not backed up by real collateral, because it was created with the stroke of a computer key...or it was printed arbitrarily...but most of it was created with the stroke of a computer key when a loan was made to someone.

That's not real money, it's imaginary money. It's a pyramid scheme.

However, as long as people continue to spend it and build on it, as you suggested, Q, then it appears to be real money and seems to perform the function of real money. The problem, however, is the ever larger bubble of debt that is created by all this lent money and the interest charged on this lent money. As the pool of imaginary money grows ever larger in a finite world, the value of the unit of currency grows ever smaller. That produces inflation. Prices go up. People on fixed incomes become impoverished. Finally the debt becomes so enormous that the entire society starts going bankrupt. We are experiencing all these things because of imaginary money that's being treated as if it were real money, and it has happened because the banks have been allowed to lend out vastly more money than they ever had on deposit...thus running a pyramid scheme. All pyramid schemes finally collapse and implode, and when they do, those with the debts are screwed.

Banks should never have been allowed to lend out more money than they had on deposit. That practice started several hundred years ago, it really got going with the goldsmiths in England, and then it spread everywhere. It made the bankers rich, but it has put us all in great jeopardy.

It has also been used to finance wars, because wars are terribly costly, and yield nothing but destruction and waste of human and other resources.