Fractional reserve lending versus.... what?

[Jamesiv1]

I am very new to the Ron Paul/Liberty movement (about 4 months) - and was prior to that a self-confessed "head in the sand" kind of guy.

I have learned soooo much in the past few months my brain hurts.

But the whole sound money/evil banking thing still has me puzzled. From what I've learned so far, Central Banks + fractional reserve lending = Evil. Yes?

I'm an artist and musician, and really bad at numbers and economic theory, so at best I'm just trying to get my head around the big picture.

I find Wikipedia quite good for big picture overviews, and so based in the wiki article I've put together this little chart on how fractional reserve lending works:



My question is: If we don't have fractional reserve lending, exactly how would banks make loans? And if it is possible to eliminate usury/interest on loans, then how would a bank make a profit and stay in business?