Belief

[Ryft]

1. God is the cake.
2. The cake is a lie.
3. Therefore, God is a lie.

http://www.youtube.com/watch?v=55h1FO8V_3w

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That would be true if the argument included an assumption, but since it only includes statements of FACT, it does not fail.

In an argument, the truth of premises is assumed (because premises are propositions, not arguments). That "gods" are products of human imagination is something your second premise asserts but does not prove—because it is a proposition, not an argument—which is fine, normally, since assuming the truth of the premises in order to reach the conclusion is simply how proper reasoning proceeds. But in this case it is not fine because your argument is viciously circular, such that the conclusion occurs as one of the premises (petitio principii fallacy).