How do we not exist?
What part of your theory says that?
You know what, I'm just going to use Occam's Razor to rule out the possibility of your theory, and in order to instate that reality simply is what it is.
English
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What is reality? Life is just a dream and we are imaginations of ourselves.
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Through the use of Occam's Razor, that theory is thrown out. The theory with the least amount of assumptions is considered better to use, even if the theory with more assumptions seems better.