You're not really creating money from money. A bank's just giving someone a new IOU. It's backed by the bank's assets (which includes debts owed to the bank).

Here's how it usually works in practice. Imagine I borrow $100 from the bank. Nothing new has been produced, but I get to extract something from the market, so at first it looks like pure inflation. However, in order to repay my debt to the bank, I need to sell something to get $100. What I sell replaces the thing I bought. And now I don't get to spend that money again: it gets destroyed when I repay the loan. In summary, all that's happened is that I've replaced one thing in the market with another.

Even if I default, the bank still owes the holder of the new money, so the bank has to sell something in the market to keep that promise.

Once you start seeing the economy as barter of "raw" net worth (the things you own plus the things you're owed minus the things you owe), everything becomes incredibly simple. The only slight complication is that people/institutions sometimes become insolvent: they don't have enough assets to pay their liabilities, so the creditors just have to write off some of their debt assets without getting what they were promised in return.