Big Mike Dreams of Building a Banking Empire
“Hi Uncle John!”
“Hi Mike! What are you up to?”
“Unc, don’t just say ‘Hi Mike.’ Address me as “Hi my dearest nephew Mike.”
“Okay, I will remember that the next time. What are you scribbling on that paper?”
“Well, when I grow up I will own and operate the most profitable bank so I am trying to come up with a name for my future bank. Tell me if this name is comprehensive enough – First American National Federal Presidents Founding Fathers Coast-to-coast Atlantic Pacific Mainland Bank of Fifty States Headquartered in White House.”
“What about the names of the states and the territories? You cannot leave them out and expect to have a comprehensive name.”
“That did cross my mind, though I am a bit iffy about it. Don’t you think it will be a bit too long?”
“You have a point there. Why not just name it Mike’s Bank?”
“Actually, I did consider some alternative names along your line of thinking. Of course, I was more forceful in my thinking and therefore considered names like Brilliant Mike’s Bountiful Bank or Magnificent Mike’s Miraculous Bank.”
“They sound more mystical. Why not use one of them?”
“Well, there is a small problem to that. See, at one point I will sell my bank to cash out and go on to do other things. What happens if the new owner changes the name to something stupid like Our Little Corner Bank? I know I will feel devastated.”
“In that case, stick to your comprehensive name. Just add the names of the states. Leave out the territories for now. Have you thought how you are going to run the bank to make it more profitable than your competitors’?”
“Yes. I will always be generous in accepting deposits but slightly tougher with making withdrawals.”
“Why tougher with withdrawals?”
“Unc, apparently you do not understand how banks make profits. Banks pay interests to depositors and earn interests from the borrowers. So, for banks to continue to be increasingly profitable they have to charge much higher interests from borrowers and pile up on deposits.”
So, how are you going to keep your depositors from withdrawing and running to your competitors for higher interests?”
“First off, I will institute one percent per month policy, meaning our depositors cannot withdraw more than one percent of their account balance per month. Of course, they must take blood tests before they are allowed to withdraw any money, which can easily take up to ten days. Actually, if blood test turns out too easy, I will have to implement DNA tests, which can take up to three months. By that time, they would not need the money anymore and leave me alone.”
“And, who will pay for the blood tests?”
“Who else – clients! They are the ones who would be annoying me with the idea of unnecessary withdrawals. I have to send tough signals to the misbehaving clients; otherwise, I will be soon out of business.”
“If the DNA doesn’t work?”
“Well, I may have to mobilize the politicians to amend the Constitution to slow down the pace of withdrawals.”
“How are you going to convince the politicians? What could be your reasoning?”
“Reasoning? Ours is a horribly savings-poor country so we need to promote savings big time. The more they are allowed to withdraw, the more they will spend, without helping the cause of savings. This way they will be forced to save and we will all win.”
“Wow! Mike, you are only ten and you have already thought of all this. How did you learn about the Constitution and Savings rate, etc.?”
“I go to a special class for advanced students called the Magnet class. The Magnet teacher talks a lot about the US Constitution, American history, American economy, etc. so I pick up a few good pointers now and then. I really like him. He is cool.”
Amazing! I can see you will be one hell of a banker! I got to run. I have a graveyard shift today. I will back on Saturday. I am curious to know how your soccer is coming along. Bye, baby!”
“Unc, wait! What about my dues?”
“What dues?”
“What do you mean by ‘what dues?’ Dues you have to pay for all the education you just received from me. How could you?”
“I thought I was helping you out with your future project? I didn’t realize I was the student here. Anyway, here is a two.”
“No! The face on two scares me. It is so vicious! I like the face on fifty.”
“Mike, here is a five – take it or leave it.”
“The face on five is equally scary. I can perhaps live with the face on ten which is somewhat less scary.”
“Mike, this is your last chance – take it or leave it. This has the face of a founding father. How could that be scary?”
“I think our founding fathers are too old to interact with us anymore. We will need some modern founders, not just founding fathers. I will contact Disney and MTV. Actually, the Beauty and the Beast will be two good ones to start with. Also, my history teacher. He has a large enough head to look like an original founding father so it would be a good mix of new and old. Meanwhile, I will keep this bill under Granny’s mattress. Do you think he can grab Granny when she sleeps?”
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