We think of a bank as like a place where we take our money and store it like we give our money to the bank people and they go put it in a giant Vault and it is safe until we need it. |
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| But that is not what is happening in reality. Banks are doing something pretty magical when you give them your money. | |
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"Once Mike's money is deposited, the bank keeps a 10% portion of it in reserve." |
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| "Looks like we can lend out $90 of Mike's deposit while keeping $10 as a reserve." | |
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Sarah walking into the bank, looking worried. |
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| "I need a loan to pay for my car repairs. Can you help me?" | |
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