My first time dealing with a bank bail-out came when I was six. Mom and Dad were fighting, and I didn’t like it, so I loaded up my little red wagon with my big blue plastic piggy bank and my little brother. My intent was to hit the little roadside restaurant a mile down the road for dinner: hamburgers. Then I didn’t know what to do.

As I pulled the wagon down the road, the cork fell out of the pig and all my money fell out into the wagon. The wagon was old and had a rusted-out part, a hole that was as big as a silver dollar. All the money drifted out piece by piece as I went down the road.

My parents bailed out my bankrupt piggy bank by following the trail of coins to a little abandoned shack where I had stopped to rest with my brother. Me, my brother, little red wagon and piggy bank were all returned home and the money I had lost was returned to my account in the blue piggy bank.

This bank bail out early on in my life caused me to study banks more closely than I would have. I noticed that banks take your money and keep it for you, so you don’t lose it or have it stolen. Early on in banking history, there were bank robbers who challenged the safety of putting one’s hard-earned cash in a bank. That kind of dangerous nonsense has nearly been stopped by all the cameras, difficult to open locks, police summoning devices and so on. Has this made your money safer? We’ll get to that in a moment.

Meanwhile, banks don’t work the way we think they work. We think we put our money in the bank and can draw it out any time. It’s our money. No, it’s not. When you deposit money in a bank, it’s now the bank’s money to loan out or do what they will. You become the bank’s creditor. The bank owes you the money you loaned them.

Now they pay you interest on that loan. This interest is a pittance of the interest they charge on loans they make to you. In addition, when you give the bank a dollar, they can use that dollar to lend out ten dollars. Neat trick, right? How do banks make money? Let me count the ways…

Other moneymakers for the banks include overnight interest where they deposit huge sums of money overnight as they are being transferred to another account. In addition, there are checking accounts and credit card accounts they charge fees for. Besides the inflated interest they make and any fees for having the account, there are late fees on all accounts as well as safe deposit rental fees. Banks also charge the businesses you use your credit card at and guess who pays for that. If you buy your checks through the bank, they get a cut of that as well. Have I missed anything? I’m sure I have, but you get the picture. Banks make money at every turn and you are the one paying.

Of course, this financial activity that is so important to the welfare of the country and its citizens, is properly regulated. Right? I’ll let you decide. Some banks have local charters from the state and are regulated by the state. Others have charters with the Federal Reserve System. The Office of the Comptroller of Currency and the FDIC also have their part. The most control is exerted by the Federal Reserve Board which also controls the money supply. The FED, as it is called, is neither a part of the federal government, nor does it have a reserve. The name is mostly to fool you into thinking it is part of the government, and it does have a reserve. The FED is run by, you guessed it, bankers who are chosen from a list of bankers submitted to the president by a committee made up of people chosen by the FEDs search committee. The list of candidates is then passed on to the president who makes nominations that are ratified by the Senate.

Basically, bankers control the selection process of the FED and all members of the FED are bankers. In this way, bankers control the money supply and have more say in the regulation of banking than you do. The FDIC and the OCC have minor parts, and I haven’t even gone into their officers and their connections. Since the FED controls the money supply and sets interest rates, these bankers are in effect controlling themselves. Is this fair? Horse patooey!

In 2008, there was a huge crash of the money supply. Many big banks became insolvent, that is they went bankrupt. The ability to loan out more than they had in reserve caught up with them. What was the result? A couple million people lost their homes because of this crisis. They were given no help. The big banks were declared too big to fail and bailed out. How much did they get from the bailout? Well, it’s difficult to figure as estimates are all over the place. The nearest I can come to it is to say the amount was between $498 billion and $700 billion. That’s a lot of horse patooey!

You still put your money in the bank instead of under your mattress because it’s safe, right? If you still believe that, you haven’t been following what I’ve said. But you can say bank bailouts have gone into the trash bin of history (Well, maybe). To keep the system running a new approach has been introduced. The banks won’t bailout next time, they will bail in instead. That means that they will take money out of accounts held at the bank to pay for their misstep. Your money. Isn’t that nice of them to invite you to the party?

Is your money safer in a bank than under a mattress? You figure that out. One thing you can always bank on- banks will make money.