<div id="readability-page-1">Banks do more than just store money - they create money every time they issue loans. This ability to generate credit fuels economic growth, but it also creates dangerous financial cycles that can lead to housing bubbles, stock market crashes, and full-scale banking crises. This episode explores how bank lending and asset prices are locked in a destructive feedback loop, where rising credit fuels economic booms until the bubble bursts, triggering economic downturns.</div>

<p>Private banks create money by issuing loans, fueling economic growth but also causing financial cycles that can lead to crises. This process links bank lending and asset prices in a feedback loop, where increased credit leads to economic booms and eventual downturns when bubbles burst.</p>

The hidden risk: How private banks create money and why it’s dangerous