Today, banks generate enormous profits from making loans to borrowers—by lending out far more than they hold on reserve.

How has the relationship between the depositor and the bank changed over time?

Doug Casey: The banking industry has become totally fraudulent. It has totally left its roots.

As I explained a couple of weeks ago, the banking business is really two separate and unrelated businesses.

One is savings accounts (a.k.a. time deposits), where you deposit your money, gold, with the bank for a fixed period of time. You're paid a fixed amount of interest. The bank lends it out for the same amount of time for a higher rate of interest. Historically, sound bankers only made short-term, self-liquidating loans backed by assets exceeding the amount of the loan—but there's still a degree of risk.

The other function of the bank is to store your capital securely. For that, you use a checking account (a.k.a. a demand deposit). The bank doesn't pay you but charges you a fee for keeping your money safe in a guarded and insured vault and giving you the right to transfer or withdraw it instantly.

These are actually two completely different businesses. But today, accounts of all types have been completely merged. The public—and almost all bankers—don't know and really don't care about any of this.