Think about it... I steal all of someones money and promise to pay them back later and they're just going to be nice about it? If this happened to a person... likely he will hunt me down and "extract" the money out of me through any means available.

Why? because typically survival depends on a persons' ability to spend money.

I am not bloodthirsty. Theft in any society typically results in extreme measures of punishment including forcefully kidnapping people and confining them in inhumane conditions (it's called prison). Additionally, when the "theft" involves survival, getting violent is a normal thing. This is not just a "totalitarian" measure.

What's going on here seems to be a social phenomenon because theft and a sketchy promise of repayment is essentially what happened. The only reason why the system remained stable was because people still accepted checks.

I mean would you accept an IOU as payment if you know the issuer essentially stole the money and won't return it when asked for it? Typically no.