Within the sovereignty of Bimini there are car manufactures and people who use cars. The number of people that need/want/use cars and are willing to labor so as to possess cars is 5 million. The average usable life of a car is 5 years. That means that, on average, one million cars per year must be replaced. The people of Bimini have jobs and they earn wages. Some of them even earn wages from making cars.

Because the people of Bimini are reasonably intelligent and not cavemen or throwbacks to the "gold" standard, there is a financial intermediary called THE central bank and this intermediary is controlled by the representative government of the people and it functions to check people out to make sure they have a job and that they appear to able to keep a job so as to pay for the car they wish to possess NOW. This "checking out" process is done on an individual, case by case basis, at the leave of those who are being "checked out".

Owing to the numbers assumed above, on an average business day 3,846 new cars roll off the assembly lines and 3,846 "checked out" people voluntarily sign agreements to pay for cars. If the competing manufacturers of cars create an array of cars that are more and less expensive and more and less durable and more and less sexy it does not really matter to the banking intermediary. We deal here with the function of the credit system and not the plethora of car types and individual preferences. We assume an average durability of 5 years and an average price of cars at $20,000 and we see that, without any consideration to profit or interest whatsoever, each month each average car "owner" will be paying $334 on a car loan. What is really happening is that the $334 per person is being delivered to the car manufacturer through the financial intermediary. The collection and forwarding of car payments on a monthly basis pays for the production of the cars that come off the line in an average month.

The people who buy these cars must, in the current system, pay for the costs associated with bookkeeping and the repossession and re marketing of cars when "buyers" default. It is only unfortunate that we would refer to this "finance charge" as "interest". It is most unfortunate because people get the idea that there is a need for some big pile of gold or a safe full of dollars to "back" the transactions that are routed through the financial intermediary. This is, of course, not true at all. The "risk" of default is assumed by the buyers of cars that do not default. As more people default, the price of extending credit rises, and the "finance charge" on new loans must be increased.