No, it's partially true. For every debt their is an asset, but the value of the debt created is not always equal to the value of the assets. Here is a good art

No, it's partially true. For every debt their is an asset, but the value of the debt created is not always equal to the value of the assets. Here is a good article from the Reserve Bank of Australia describing how banks create money via loans, and lists the conditions by which "money creation is constrained." Note how none of the conditions ensure that Value(asset) = Value(debt) "Money can be created, however, when financial intermediaries make loans." "However, the process of money creation is constrained in numerous ways and depends on the behaviour of borrowers, banks and regulators, as well as the stance of monetary policy. " https://www.rba.gov.au/speeches/2018/sp-ag-2018-09-19.html https://www.rba.gov.au/speeches/2018/sp-ag-2018-09-19.html Edit: just to clarify, imagine a pre-GFC mortgage of $1million. This loan results in money creation of $1million + loan of $1million. But if the market crashes and the asset(house) is now worth $200000, the house may be forfeited because the loan is not being repaid. If the house is sold by the bank to balance the debt, the economy now has $0.8million extra money floating around. The bank may have to pay the central bank this $0.8mill eventually, but will do so under relatively tiny interest rates, so the money remains in the economy for as long as it takes the bank to repay the loan. Or the government bails the bank out and the created money becomes permanent!