A bank does not need $10 million to give $10 million in loans. It only needs $1 million, your trust, and a little bit of math.

When you deposit $1 million, the bank keeps a small part and lends the rest to the borrower. The borrower spends $1 million, and the money returns to the bank as another $1 million deposit. Now, the bank can lend again. This cycle repeats, making the same money work over and over. U.S. banks are allowed to multiply credit by up to 10 times.

So, with just $1 million, the bank creates $10 million in loans. Magic? No, just a system built on promises.

Of course, if everyone asks for their money at the same time, the magic disappears. That’s why banks really, really hope you don’t do that.

Funny how something so real and so important is based on something so fragile, right?