Banking and its effects on the money supply and asset bubbles: Part 4

What is the impact of a larger money supply on asset bubbles?

Dear Reader,

In Part 1 of this series we dissected what a bank does at its core.
In Part 2 we looked at how a fractional reserve banking system works.
In Part 3 we showed how this banking system increases the money supply.

Now, we will look at how this ability to increase the money supply out of thin air can create a self-reinforcing bubble.

Instinctively, …