Buddy, I strongly recommend you turn off Fox news for a moment and consider the way the bubble was actually formed. (Forgive me if you're not a Fox news watcher...but your post is characteristic of the rhetorical malarkey they spread...)
Big banks bought up "sub-prime" mortgages from small lenders at a massive discount. These lenders wanted to dump the loans anyway, because they were forced to lend to people who couldn't afford homes. The big banks packaged large groups of loans and called them "assets" - then sold portions of those "assets" back to the small banks and lenders, and on the international market. Now, technically, that's legal - anticipated income can be considered an asset. However, many of these loans that were part of the packages were already in default. This made the assets "toxic" - if the banks held on to them, they'd lose money, but as long as they didn't foreclose, they could claim the asset. So, each time they repackaged these mortgages, they were able to falsely inflate their reported earnings. THAT's what made it seem like there was actually more money than there really was. Couple that with the fact that by buying up the mortgages, the value of homes was artificially inflated as well. People had to invest more in their property in order to become homeowners. When the market crashed, and property values plummeted, those investments deflated or disappeared. THAT's why we had a recession. The "fake money" talk is nothing more than a failure to understand the function of a "fiat" currency - and we don't have space here for a course on global economics.