mendelsd

"In America, for example, the benchmark measure of inflation (CPI-U) has been modified by ‘substitution’, ‘hedonics’ and ‘geometric weighting’ to the point where reported numbers seem to be at least six percentage points lower than they would have been under the ‘pre-tinkering’ basis of calculation used until the early 1980s."

"We should directly address our lack of competitiveness by the most obvious and effective means available: by bringing about a substantial devaluation of the currency."

Well, that's the crux of it right there. You are disagreeing with several authoritative sources who say that no such transfer happens, and in general the loaned funds are created out of thin air.

Standard & Poor's: “Banks lend by simultaneously creating a loan asset and a deposit liability on their balance sheet. That is why it is called credit “creation” – credit is created literally out of thin air (or with the stroke of a keyboard)”

Group of 30: "... banks can and do create both credit and money. They do this by making loans, or purchasing some other asset, and simply writing up both sides of their balance sheet."

Richard Werner: "...each individual bank creates credit and money newly when granting a bank loan."

Banks are subject to constraints. They need to retain enough capital to absorb losses on their loan book, and they need to retain enough reserves to cover withdrawals and clearing requirements. They are free to create money "out of thin air" insofar as they meet regulatory requirements associated with those constraints. [1]

You wrote: "I've worked in retail banks and have some hands one (sic) grasp of their day to day operations."

I suggest that your experience does not encompass the whole sector, and that may be the source of your confusion.

“Banks lend by simultaneously creating a loan asset and a deposit liability on their balance sheet. That is why it is called credit “creation” – credit is created literally out of thin air (or with the stroke of a keyboard)”?

Also Prof Werner's analysis, he reaches the same conclusion.

"Banks do not view the creation of money as an objective itself. It is a by-product of the banking sector’s business operations. However, it is of great economic and social relevance.

Not every loan ultimately results in new money. The majority of new lending is used to redeem existing loans. Money is only created to the extent the gross lending exceeds the value of the existing loans being redeemed."

That note refers to the "great economic and social relevance" of these banking operations. Here's Professor Richard Werner talking about this at length. [2]

Here's Perry Mehrling (who teaches Coursera's Economics of Money and Banking) weighing in [3]. He explains that it's a nuanced issue but clearly agrees that the "credit creation view" is important and quotes a Group of 30 report:

“In a barter economy, there can rarely be investment without prior saving. However, in a world where a private bank’s liabilities are widely accepted as a medium of exchange, banks can and do create both credit and money. They do this by making loans, or purchasing some other asset, and simply writing up both sides of their balance sheet.”