It's not the income itself that really gets affected from what I know but rather how much you can afford, so what inflation does it causes prices to rise far more than any speculative trading could cause and that means if your employers aren't getting extra money from money printing both you and they have to work longer and cut costs even further in order to pay for things that would previously be lower in price.

Roughly, how much per cent of the Annual Gross Income value does a State rip in currency debasement? I mean, how the two values can be related, roughly, just to have an idea.

Johnyj, try thinking for a moment, where is all that money going to come from to purchase the bonds? Oh yeah! Printing! Because there sure aren't countries that can afford it in taxes! Just like when the banks got bailed out the government had to ask the fed for money to do it, how did they get that money? Printing again! You think the federal reserve actually has any money of its own? Trust me, it doesn't, even if it did have stuff like gold for instance which they have reportedly been stocking up on, they certainly aren't going to share it with you muppets, you're getting conned and you don't even know it, it's the ultimate scam.

You should look over in the "lending" part of the forum, there are people making loans in btc right now.

Certainly bitcoin banking would allow FRB.  You can check the balance of bitcoin that the bank is holding in reserves only if the bank chooses to provide you with the list of bitcoin addresses where all their bitcoin is stored and provide you with proof that they have the private keys associated with those addresses.  But even then, you only have half the story.  You know how much they have in reserve in total, but you have no knowledge about what the total is of all deposits they have.  A bank won't keep your funds segregated in its own address anymore than they keep your fiat segregated in its own envelope.  All deposits get mixed together.  The bitcoins you withdraw aren't likely to be the same ones you depoisted.

You can call it "accounting fraud" if you like, but it doesn't change the fact that there is then 110 bitcoins worth of spending power in the whole economy.

Very true, these are some of the benefits of having a bank. But in BTC's case, things are different: Not so many people will take loan from a BTC bank, since the loan interest is just too high when no real world projects can have higher ROI than BTC itself. And without loan, banks can not make a living, or they simply become an asset management business

We are talking about two different things, I think.  FRB with gold was different than modern FRB.  With gold, the bank would usually be lending by offering a promisary note or a warehouse receipt based upon gold that was kept in the bank.  It was really just faith in that bank that they could actually perform should the deal go sour, not really that there was that much gold available.  While it's possible for a bitcoin bank to do something similar, the network (which the bitcoin economy is dependent upon) will not accept promises or warehouse receipts, only actual bitcoins.  If a bitcoin bank were to sell CD based upon the idea that those bitcoins would be lent back out, yes FRB would work, but that would be more like the free banking era after the Civil War, not the modern version of FRB.  Yet, such a bank would have to be open and honest about such a thing, and keep whatever on-demand accounts that it maintained completely seperate from those lending funds, or a run would eventually destroy them.  Such things happened on a regular basis during the free banking era, as bank owners got to greedy and too confident that customers wouldn't ever lose faith.  If a bank were to offer bitcoin bonds, and then lend those funds out in loans, the honesty of the pattern might just permit things to work.  Practically, however, modern banks don't work this way.  A modern verison of a bank actually gets it's 10% reserve requirement from savings accounts of all kinds, and then lends out funds that have never existed to 9 times that original deposit amount.  It's the implicit backing of the central banking (and thus taxpayers) that permit such an activity.

Lets pretend for a moment that banks (and their insurance companies) settle on 10% reserve.  So The banks can loan out some of their deposits, but have to keep at least 10% of all deposits in actual bitcoins.

Given your example the bank has 11 actual bitcoins and 16 bitcoins worth of deposits.

So the bank loans out another 9 bitcoins to Dave.
Now we have 11 coins in bank and 25 bitcoins worth of deposits.

Then the bank loans out 6 coins to Edward.
Now 11 coins in bank and 31 worth of deposits.

This process can continue until there are a total of 110 bitcoins worth of deposits.
So magically, 11 "real" bitcoins becomes 110 bitcoins worth of spending power in the economy.

Transactions between people or businesses that use the same bank don't even go through the blockchain.  The bank just adjusts the necessary deposit account info accordingly.
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Why will people use banks instead of just keeping their own secure wallets?  A variety of reasons.  Perhaps they trust the bank to do a better job of securing the bitcoins than they believe they can do themselves?  Perhaps the banks offer to pay a small interest rate on deposits? Perhaps the banks provide a convenience for engaging in bitcoin based transactions in the physical world (debit cards, checks, etc)  Perhaps the banks offer reduced transaction fees (bank only has to pay blockchain transaction fees on a 10BT transaction instead of thousands of transactions valued at over 2 million BTC)?

If FRB = Fractional Reserve Banking then you're wrong, it's perfectly possible to do it with bitcoins, as it was possible to do it with gold.
The only thing that the protocol limits is the monetary base. Higher aggregates can exist.

That said, the concept of a "central issuer" inflating the monetary base to save the banks that took too much risk cannot exist with bitcoins directly, as with gold.