This article insinuates that money is not created out of thin air under the assumption that the thing being created is an IOU and therefore not money.

Duck typing, however, begs to differ, and the "fractional" part of "fractional reserve" is in practice quite small compared to the value that banks keep up in the air. The entire system as well runs on the basis of Statistical multiplexing.

Assume for a moment $100 dollars was printed. Ever. 100 people want a loan of 1 dollar, and various banks deem these people trustworthy enough to go ahead with it. Everyone else in the world has deposited %'s of a cent, which are Federally Insured. Meaning that regardless of bank runs, the taxpayer of the United States takes on an onus to make sure any FDIC insured institution's deposits are covered and returned in the event of a bank folding. However, let's say our banks all had all 100 of their granted $1 loans withdrawn, Just before everyone else decided they wanted their money back. $200 worth of real monetary payout obligation just popped up out of nowhere, and there's only $100 of cold hard cash in existence.

Ruh ro, Raggy.

This is the Fairy Dust. If you hold the banking system upside down, and drain it of ALL the combined value of all deposits, then line that up with what everyone should have, somebody is going home disappointed. Finance in general works though, because by and large, people don't want to deal with the hassle of looking after all that cash. All the accounting, and remembering safe combinations, the risk of presenting too tempting a target for N'er-do-wells, and the constant being pestered by friends and family for money! Ack! No one has time for that!

So they delegate it to banks. Banks then amongst themselves tend to be able to service everyone's immediate needs, statistically speaking, up to a point. What happens at that point is where the controversy exists because even "blessed" banks capable of printing money will find that their money they just spent so much time printing is only good in as much as people are willing to have faith in it that it is worth something and will be honored by everyone around them tomorrow. This is the Fairy Dust. The Long Con. The great lie, the Circular Reasoning at the core of Finance.

"Here, have some money. I made it today. You can probably do X with it."

"What about tomorrow? Or if you make more money? Or if you do something stupid?"

"Stop asking questions like that and go buy some bread."

Arguing that it isn't the commercial bank "creating" money when the money creation process is essentially managed via an indirection mechanism is a bit disingenuous, and just reiterating how the money creation process is still essentially arbitrary, and performed via indirection doesn't do anything to remedy

A) A growing crisis of faith with the entire edifice's seeming inability to favorably create positive results across the board.

B) the fact people see a spigot and tend to grab on to the easiest solution in their minds of just turning it on and adding more without realizing that the thing coming out of the spigot doesn't really matter, what really matters is the trust between people to make good on their promises which is what Fiat currency is meant to be a symbolic representation of in the first place.

C) The very real challenge that it may just be that there is a fyndamentally structural problem with transaction activity overall that results in accumulation of capital in a handful of places due to misalignment of priorities with regard to keeping money changing hands.

Label Start
No trust->no room for doing good business.
No good business->nothing gets done, or gets done so poorly that the outputs cannot be sustained without a disproportionate investment of input.
Nothing gets done well->people get pissy, and lose trust.
Goto Start.

Finance is faith. Mammon writ large. If we try to underpin society on finance alone instead of a commitment that the outcome of us (as a society) being alive should be the creation of a better world for us all having been here, the entire house of cards falls apart.