However, that presupposes that nobody starts performing fractional reserve lending using bitcoin as a currency. If that is allowed, then we're back to the existing banking system and it's varying supplies of money in proportion to banking debt. Nothing has really changed except that we have slightly more efficient inter-bank exchange mechanisms...unless we get a proliferation of alt-currency lending models, in which case we're back in the US wildcat banking era (circa 1840's) - a period that was not exactly renowned for its financial stability.

Alternatively, in the hypothetical world (because it's really quite hard to stop) where there is no bank lending any more... then we have the problem of how is a modern economy going to work without banking debt? As you say, lots of interesting questions on the economics side.