Q: What are banks for?
A: To make money.
Q: For the customers?
A: For the banks.
Q: How do banks make money?
A: Customers lend it to them, and they lend it to other customers, each time charging interest.
Q: How much interest?
A: It depends on the bank. They set the rate as a rate of profit.
Q: Why isn’t it my profit? It’s my money after all.
A: You make a profit as long as you don’t withdraw your money: usually around half of one percent.
Q: Why do I need a bank at all?
A: You have to pay for goods and services that will not take cash.
Q: Why won’t they take cash? It seems a system designed to guarantee the banks a profit.
Q: And why would I need a bank if I didn’t want to withdraw my money?
Q: Hello? Why would a bank not want me to withdraw my money?
A: Because if you withdraw it they can’t lend it to anyone else.
Q: And if I remove my money which has been lent to someone else?
A: The bank will give you someone else’s money.
Q: But suppose that person wanted his/hers too? What if everyone wanted his/her money at once?
A: It’s the theory of banking practice that they never would.
Adapted from G. Edward Griffin. The Creature from Jekyll Island and Punch.