The Great Divergence

[Zenda]

As a small nit, however, money is not "real," at least not in its modern form. Money (the national bank note) is just the most basic financial instrument, a promise of value. It is different only in its simplicity from the more complex derivatives, options, mortgages, securities, bonds, and other "phantom" financial ideas.

I think it's more as just that. The value of 'real' money is guaranteed by authorities, as you say, but the value of 'phantom' money is only promised by its users. Real money cannot be issued by just anyone, while phantom money can simply be created by inventing something abstract and assigning it a value, which is 'backed' mostly by already owned phantom wealth, and only for a small percentage by real wealth. Such 'sophisticated' methods typically require a constant influx of new capital, like any other pyramid scheme, so the total amount of phantom money needs to grow. This is what mostly drives the divergence, imo.