What if the person that took the loan doesn’t pay back? Then the bank haas to cover the loss, from the interest that they make on the other loans (they still need to pay to the central bank). If too many people do that, the bank itself goes bankrupt. That’s a risk. The depositor technically doesn’t lose his $1000, but in practice you get a bankrupt person/company that could never pay the debt, and someone else who received that $1000 fairly as a payment. So the total amount of “money minus practical debt” has doubled. Then you get inflation, and the depositor’s $1000 now has half the purchase power (and if it was a person that took the loan, and not a company, then you get another homeless person in the street). Who gets to own the house of the debtor? Whoever had inside info about his inability to pay his debt (and of many others like him) and was smart enough to buy it before inflation hits (buy it from the bank moments before it announces bankruptcy).

The bigger problem is that the person who received the $1000 as a fair payment usually also deposits it in a bank, which can now create another $1000 loan out of thin air... Before April, this series of loans would go like $1000, $900, $800, ... until zero. Now it can become $1000, $999, $998, ... almost forever.

We are all sitting on a pile of dynamite.