"have a think about this banks create money out of thin air that they loan out, the loan is repaid to the bank with interest, the bank now holdsthe purchasing power of the loan and interest from nothing infact the bank holds the purchasingmn power of all loans created from thin air."
Sorry to say, but you have to go back and think again because what you are saying is very far from being correct.
The money loaned out represents a LIABILITY from the bank to whatever ends up with the money in his or her pocket. When the debtors' default and the liability cannot be covered with capital and reserves the bank goes belly up.
When the loan is repaid the LIABILITY disappears. What a bank owns is its capital, its reserves and profits. Banks are just intermediaries between borrowers and lenders. At one level there is a demand for money and at another a supply and the function of the banks it to match those two at a certain risk to themselves.
Money printing is the result of a higher demand for money by governments, private institutions and the public. Banks do not force anybody to apply for a loan. If you want to pay 1 million for a house which 20 years ago changed hands for 100 thousand, please talk to your banker because he will be delighted to print money to make that possible and to destroy such money when you pay the loan in full.
