> money is just a competitive resource we use to outbid each other for _real_ things

That's true, but the thing that's lost is the economic/productive capacity that the money was spent on, that could have been used for other (better) purposes.

For example, if I raise $100mn in a frothy market, and spend it on employing 100 Engineers on $1mn/yr salaries for 1 year before ultimately going bankrupt, it's true that the money doesn't disappear, as it was simply transferred from the VCs to the Engineers, but what's spent/consumed is the Engineers' time. Society can never get those 100 person-years back, and the VCs have to write their capital investment to 0.

The other comments are separately true - money is created by bank borrowing and destroyed by loans being repaid or going bad. Periods of speculation often result in increasing leverage (e.g. borrowing to buy stocks/houses), which does result in the destruction of money when it unwinds (as well as damage to bank's balance sheets, which can become problematic when it happens at a large enough scale - see 2008).