Hartford, Conn. - A man walked into the bank yesterday, and said that he had some money that he wanted to have kept safe, and how much would they charge him to guard it for him.
He was quite surprised when he was told that they would pay him, and further, they would provide him with a variety of checking services.
As the man was not born yesterday, he naturally left - without depositing anything - and thought about it. He realized, as many others do not, that no one works for free. If they aren't charging him to guard his money, they must be getting money elsewhere.
Then he realized what several generations of Americans have apparently failed to. That the banks were making money - his! All that money that goes in to be guarded, is actually taken right out and spent by the bankers, in projects that they hope will work!
Distressed, he called the District Attorney's office, who refered him to a variety of other agencies. Finally, he found someone to explain to him the concept of "fractional reserves", in which banks are only required to hold a small percent of the money that they actually promised everyone they'd hold.
This allows them to invest enormous amounts, and if they guess wrong, the government will bail them out.
The man was very puzzled as to why anyone would be fooled by this. "So I give them $100,000 to hold, as do many other citizens in varying degrees. They don't hold it, they invest it in things to make themselves money, and give me a smidge of the take back if it works. But if it doesn't work, they call up the government to get my money...but the government then calls me up to get it from me!"
With that, he went home and started to put his money under his mattress. But then he realized something. The money is printed by the government, and it does not represent any actual wealth, but is only based upon their restraint in not printing too much. Yet he noticed that they always did. And that thus by what is called inflation, keeping his money under the bed would cost him purchasing power each year.
So he grabbed his money and spent it on real and tangible goods, investing in home and property and solid material things.
And so should you.