Not true one bit. Under gold, with full reserves, its possible to expand Debt multiples beyond the supply of money by simple lending.
One can expand debt, whatever the underlying asset, but the interest (when not regulated) the market is dynamically setting will price in the risk-reward with higher or lower %.
It has to do with perpetual Principle debt. Re-lending the same BTC, multiple times created multiple debts tied to that same single BTC. Default's are inevitable. Just like Gold.
I agree one can not re-lend the same asset, but one can lend more from same asset (to other fiat?) if it appraise in value. Like many house owners do when using their house as an ATM.
Re-lending is the issue. I lend you 1$, you lend 1$ and then someone else lends 1$. Now there is 3$ of debt and 1$ in circulation. Banks and secondary lenders behave similarly.
