If naked shorting is bad because it creates a phony supply of a thing which doesn't truly exist (i.e. stock shares), why do we tolerate fractional-reserve banking, which creates a phony supply of dollars which do not really exist?

I think we're seeing now that if any bank should suffer a "run" by depositors, the Fed will simply print dollars sufficient to bring that bank up to 100% reserve so as to meet the redemption. This is how our upward spiraling deposit guarantees will be met. You'd be made whole in dollar terms, but will those dollars be able to buy for you?

First to fail and get their dollars while their hot off the press will win, before the inflation kicks in and debases the currency for the rest of us.

It seems to be that naked shorting and fractional-reserve banking are much the same as overselling seats on airline flights or tickets to a game. Perhaps much of the time not everyone makes their flight or travels to the game, but it is represented that they've truly purchased the right to do so, if they make good on their end and show up. But… not really.

I believe that just as it isn't fair to sell short a stock you haven't been able to locate and borrow from a real shareholder, a bank ought not create $8 (or even $30) new dollars for each $1 that comes across the transom to them from a depositor.

Am I missing something?