This system is called 'Fractional Reserve Banking'. The current system of banking and money creation has only been around for a short time and is the model which has been used globally since 1971 when the U.S. stopped linking the value of the dollar to gold. Before this time the money supply was restricted by the amount of gold owned by the issuers of money. Later in the mid-1990s the U.S. then repealed the 'Glass-Steagle Act' which had prevented banks from using depositors funds to speculate on global markets. These two events together mean that international financial institutions now have a potentially unlimited supply of money to 'play' with on the global markets. In the history of mankind, every fiat currency that has existed has at some point become worthless and disappeared.