Fractional reserve vs. gold reserve banking

Back in the old times, central banking was based on gold reserve, which means that the amount of money in circulation is equal to the value of gold in possession of the central bank.

Then came fractional reserve banking, which means the the amount of money in circulation (as cash plus loans) exceeds the value of guarantees against which the central bank and/or other banks give out loans.

Is fractional reserve banking a genious invention to increase the economic productivity of society, or an evil pyramid fraud scheme that impoverishes the population?

Wiki says:

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via International Skeptics Forum http://ift.tt/2hIy3LZ