Marilyn Writes

Marilyn MacGruder Barnewall began her career as a journalist with the Wyoming Eagle in Cheyenne. During her 20 year banking career, she wrote extensively for The American Banker, Bank Marketing Magazine, Trust Marketing Magazine, and other major industry publications. The American Bankers Association (ABA) published Barnewall’s Profitable Private Banking: the Complete Blueprint, in 1987. She taught private banking at Colorado University for the ABA and trained private bankers in Singapore.

Sunday, March 27, 2016


By Marilyn MacGruder Barnewall
March 27, 2016

It is Easter... the day of the Resurrection of Jesus Christ. Easter proves that love is stronger than hate, good triumphs over evil, and that truth sets us free. The cobwebs of ignorance are removed by shining the light of truth on them. Slimy secrets exposed no longer withhold truth from people who seek it.

It doesn’t always happen on our time schedule, but it always happens.

That is why we are told to seek... why we are promised that if we seek we will find answers to our questions. People, it seems, are lazy. We stopped seeking and began saying prayers asking Jesus to seek and provide the answers for us... or we relied on our Parson or Priest or a television personality to do our seeking – to find truth for us. We must find our own truths.

We stopped seeking answers to worldly matters, too. We turned everything over to politicians so we would have more time for ourselves... our personal needs. And that’s how we got in our current mess... overtaken by corruption in the hands of power seekers.

How could a greater contrast between two philosophies of life be made clearer during this Easter Week? Those who follow Islam gave us Brussels. Jesus Christ gave His life for Christians.

How did our lives, our sovereignty as a nation, our peaceful world get lost so quickly? How did our world change so fast? It did not. What we are seeing today is the result of plans that were put in place long ago and have been implemented one small step at a time. For example, Thomas Jefferson was the first President to declare war against radical Islamists.

It is reminiscent of what happened to the Catholic Church when it got caught up in the evil of pedophile priests abusing young boys. It is the worst kind of abuse of power. It is a puzzle that took years to figure out and Rome is still working to resolve it. Rome thought evil could be swept under a rug... but the light of truth always surprises evil doers.

Before Catholic haters jump to conclusions and before Catholics become defensive, what follows is a true story. It explains how the communists plotted the downfall of the Catholic Church – and have come a long way toward achieving their objectives. It is a story that is difficult to believe... but it is the absolute truth and is exemplary of just how far diseased minds go to achieve the objectives of world dominance.

The book School of Darkness was published in 1954. It was written by Bella Dodd, from 1932 - 1948 an organizer for the Communist Party USA (CPUSA). For four years, she sat on the CPUSA’s National Council. Bella Dodd says: “In the 1930s we put eleven hundred men into the priesthood in order to destroy the Church from within.” In a Fordham University lecture, in 1950, she said: “Right now they are in the highest places in the Church.”

This may help some people understand the socialist/communist messages that periodically emerge from priestly commentary at Sunday Mass – or from the Pope in Rome. Just as America today is the result of policies put quietly in place in the late 1800s to turn our Republic into a corporation, the Church today faces the problems caused by those eleven hundred communists placed in the Catholic Church by CPUSA way back in the 1930s and 40s.

Today, we count the ways in which people can abuse power and impose the cruelest of life-changing experiences on others while, simultaneously, holding themselves and their association with the abuse above it all—because of position. Politicians do it, teachers do it, policemen and judges do it—and priests do it. All are human.

It is important to realize that those who abuse the power of position are those who suffer from the greatest sense of personal powerlessness. They are the weakest, most insecure among us. When asked why they abuse others, many respond “Because I can.” Their power over others makes it possible. Not all politicians, teachers, policemen, judges — or priests or presidents — gain a sense of personal power from their occupations. Most seek to serve. Too many, however, do not.

 Emotion can carry us into the darkness of half-truths, but there is a greater point to be made. All believers suffer persistent attacks against Christianity, family, and everyday goodness and we must not allow them to overcome us! Be aware of the attacks and why they are occurring. They want to take your faith, your family, and your goodness from you. It is the only way they can bring down this Great Nation.

To prove my point, between 2001 and 2005 the Associated Press investigated sexual misconduct in our public schools.  They found 1,801 educators were guilty of sexual misconduct with youths.  We don't hear about this sexual abuse in government's public schools... but the mainstream media makes sure we hear about any deviance within any religious organization.  Ask yourself why.

In a 2004 report for the U.S. Department of Education titled “Educator Sexual Misconduct: A Synthesis of Existing Literature” done for the “No Child Left Behind” program, Dr. Carol Shakeshaft said that a study she did of complaints against Catholic priests versus public school abuse over a 50-year period proved “the physical sexual abuse of students in public schools is likely more than 100 times the abuse by priests.” Still, parents appear to have no time for School Board meetings. When did you last attend a Board meeting?

When the first Catholic priest abused his power to sexually assault a child and was protected by the Church rather than reported to the police, a Holy obligation to “let the little children come unto Me” was violated. That command was given by the highest possible authority within any Christian Church.

The Vatican has said that sinful and criminal abuse of minors by members of the Church must be condemned. They agree there is a need for justice and amends. I say the Church needs to clearly define at what point it’s time to dial 911 and let law enforcement handle unlawful behavior. All humans must be held accountable to the same standard before the law. An Oath to God and the designation as a “Man of God” does not change that simple rule of the most basic definition of civilization. Too, it’s pretty clear that a “Man of God” doesn’t sexually assault children.

All of the above takes me back to Bella Dodd’s book, School of Darkness. A graduate of Hunter College and New York University’s School of Law, Mrs. Dodd was a school teacher and lawyer by profession. Reading Bella Dodd’s book made me realize the Church has been fighting a communist recruitment program put in place in the 1930s by CPUSA. All Christians have been fighting this battle and the Communist Party is still up to its old and very dirty tricks in our fight against radical Islam.

It is for this reason I draw the analogy between what Bella Dodd reports about the CPUSA and our President's inability to accurately define our current Middle East enemy in the war on terror. Until Mrs. Dodd wrote her book and explained what happened in the 1930s and 40s, the Catholic Church couldn’t define its enemy. And, I would point out the communists are as anti-Christian today as they were in 1940.

Specifically, Mrs. Dodd said: “In the 1930s we (CPUSA) put eleven hundred men into the priesthood in order to destroy the Church from within.” The idea was for these men to be ordained and progress to positions of influence and authority as Monsignors and Bishops. Just 12 years before Vatican II, held in 1962, she said: “Right now they are in the highest places in the Church.” The plan was to weaken the church’s effectiveness against Communism. She stated that these changes would be so drastic, “you will not recognize the Catholic Church.”

During her Fordham University lecture in 1950, Dodd talked of the chaos planned. A monk who attended the lecture is quoted from Christian Order:

“I listened to that woman for four hours and she had my hair standing on end. Everything she said has been fulfilled to the letter. You would think she was the world’s greatest prophet, but she was no prophet. She was merely exposing the step-by-step battle plan of Communist subversion of the Catholic Church. She explained that of all the world’s religions, the Catholic Church was the only one feared by the Communists… The whole idea was to destroy, not the institution of the Church, but rather the Faith of the people, and even use the institution of the Church, if possible, to destroy the Faith through the promotion of a pseudo-religion: something that resembled Catholicism but was not the real thing.

“Once the Faith was destroyed,” the Monk continued, “she explained that there would be a guilt complex introduced into the Church... to label the ‘Church of the past’ as being oppressive, authoritarian, full of prejudices, arrogant in claiming to be the sole possessor of truth, and responsible for the divisions of religious bodies throughout the centuries. This would be necessary to shame Church leaders into an ‘openness to the world,’ and to a more flexible attitude toward all religions and philosophies. The Communists would then exploit this openness in order to undermine the Church.”

Has anyone listened to the recent comments of Pope Francis lately?  They ring with "openness."

In New York, the CPUSA got into trouble and Dodd was a featured part of the problem in the New York Times reports. Dodd, who parted ways with CPUSA, went to Washington to argue an immigration appeal and met with a friend from the old East Bronx area of her childhood. He talked with her about testifying against the Communist Party in front of the House UnAmerican Activities Committee and asked if she wanted FBI protection. He then asked if she would like to see a priest. She was startled by the question, but was amazed at the intensity of her own answer as she said she would.

“Perhaps we can reach Monsignor Sheen at Catholic University,” he said, and an appointment was made for her late that evening.

From School of Darkness, Chapter 16:

“A thousand fears assailed me. Would he insist that I talk to the FBI? Would he insist that I testify? Would he make me write articles? Would he see me at all?

“...By what right, I thought, was I seeking the help of someone I had helped revile, even if only by my silence? ...I rang the doorbell and was ushered into a small room. While I waited, the struggle within me began again. Had there been an easy exit I would have run out, but in the midst of my turmoil Monsignor Fulton Sheen walked into the room, his silver cross gleaming, a warm smile in his eyes.

“He held out his hand as he crossed the room. ‘Doctor, I’m glad you’ve come,’ he said. His voice and his eyes had a welcome which I had not expected, and it caught me unaware. Monsignor Sheen put his hand on my shoulder to comfort me. ‘Don’t worry,’ he said. ‘This thing will pass,’ and he led me gently to a little chapel. We both knelt before a statue of Our Lady. I don’t remember praying, but I do remember that the battle within me ceased, my tears were dried, and I was conscious of stillness and peace.”

Archbishop Fulton J. Sheen (as he was at the end of his life) never hesitated to point out the evils of communism on his popular television broadcasts of the 1960s. He was an exceptional man. He counseled Bella Dodd as disease sent her to her death. He is the reason she wrote her book.

The impact of Archbishop Sheen’s counseling is apparent in Bella Dodd’s words:

“On my way to the airport I thought how much he understood. He knew that a nominal Christian with a memory of the Cross can easily be twisted to the purposes of evil by men who masquerade as saviors. I thought how communist leaders achieve their greatest strength and cleverest snare when they use the will to goodness of their members. They stir the emotions with phrases which are only a blurred picture of eternal truths.”

There is no doubt the current crisis and liberal attitudes within the Catholic Church have hurt many people. The headlines achieve the objectives set by CPUSA over 80 years ago. This, then, established the battleground of the Catholic Church from 1950 until—today. It is also the battleground of our schools, families and all other character-building tools used by humanity to keep evil in its cage and civilization moving forward and not “progressing” back into the cave.

As Bella Dodd said, “I thought how communist leaders achieve their greatest strength and cleverest snare when they use the will to goodness of their members.”

That is a danger all Christians face. Goodness misdirected can deter us all from its very purpose. We must keep a clear line of delineation between how faith and religion are defined. Our First Amendment rights to freedom of religion do not carry with them the right of Islam to establish a separate government with its Sharia statutes and laws as part of its religion.

What is “Goodness?” It is best defined by the reason we celebrate this day: Easter and the Resurrection of Jesus Christ who sacrificed His life so that we might have eternal life.

Compare that with the tyrannical taking of other lives so radical egos can celebrate its power over the powerless... whether it is done via violence in Brussels or non-violence in Washington, D.C.

Happy Easter!

© 2016 Marilyn M. Barnewall - All Rights Reserved

Saturday, March 12, 2016


By Marilyn MacGruder Barnewall
President, The MacGruder Agency, Inc. (Retired)


A state bank is owned by the public and is not a private corporation.  It is, thus, a public bank. There is only one state bank in the United States, the Bank of North Dakota.  A state bank is quite different from state-chartered banks which are present in most of the other 49 states.

The banks on the street that do business with the public are owned by private investors, just as they are now.  They are not owned by the state.  A system of state-owned banks on Main Street would be a socialist or communist system and state banks represent quite the opposite.

A state bank is an administrator.  It grants charters to banks and acts as a correspondent bank for them.

At the current time, money center banks act as correspondent banks for the independently owned banks on Main Street.  A correspondent bank receives loan requests from smaller banks – banks too small to make a large loan when a client or prospective client requests one.  This “loan sharing” concept is good… until the large banks become endangered by marketplace forces and their own greed or stupidity.   

Under the current correspondent banking system, if one bank at the top fails, it has a spin-off effect on all of those banks for which it has acted as a correspondent bank and participated in loans with independent banks.  In a failure situation, the big bank must call its loans… including those loan participations it has made jointly with smaller banks while acting in a correspondent – or, a joint lending – capacity. Thus, it puts the smaller banks at risk of failure too… it puts the entire system at risk of failure.  That is why such banks are called “too big to fail” – or, “too big to jail.”

In a state that has its own state bank, nationally-chartered banks (banks chartered by the Comptroller of the Currency) are still invited to do business.  The primary difference for them in the new environment is that the state bank now acts as the correspondent bank, not the nationally-chartered bank... not Chase Manhattan or Wells Fargo or Bank of America, etc.


1.               Implement a state bank similar to the system in place for 93 years in the State of North Dakota.

2.               The State of North Dakota:

A.         Has enjoyed an unemployment rate as of July 2011 of 3.3%.

National                                  9.1%
North Dakota                         3.1%
B.         With a population of about 650,000, the Bank of North Dakota has, during the past ten years, paid the State Treasurer more than $325 million from bank profits.

C.         In 2010, the worse economy in recent history, North Dakota had its largest financial surplus in history.

D.         North Dakota tops the list of state economies, year after year.

E.         In 2011, North Dakotans will see almost $500 million of their money returned to them in the form of income and property tax cuts.  Combined 2009 and 2011 tax reductions, the average North Dakotan will enjoy a 30 drop in percent tax liability.  The Legislature also funded $342 million in property tax relief.  The owner of a $150,000 home will enjoy a tax reduction of $506.

             $341.79 million in property tax relief;
             $120 million reduction in income tax rates (17.9%)
             $25 million reduction, corporation taxes (19.5%)
             $2.125 million tax reduction, financial institutions (a drop from 7              percent to 6.5 percent).

F.         Enjoys population growth of 6% per year;

G.        No bank failures during the past ten years; the lowest home foreclosure rate in the nation; the lowest credit card default rate, too.
Specifically, what does a state bank do that causes such immediate and positive results for a state’s economy?

In states other than North Dakota, the billions of dollars received from taxes and fees are deposited in large commercial banks – just like those that are borrowing trillions of dollars from the Federal Reserve System… from taxpayers.  In North Dakota, these deposits become “captive.”  They stay in the state.   The corporate headquarters of Chase Manhattan (New York City), Bank of America (Charlotte, NC), Citigroup (New York City), Wells Fargo (San Francisco) decide what they will do with those deposits.  They are famous for… what?  Their history says they invest in mortgage-backed derivatives, for one thing.  Or, the too big to fail/jail banks lend your tax dollars that your state deposits in them to businesses in their home states, not in your state.  Or the Federal Reserve secretly lends the money to Wall Street or foreign banks and businesses.  Your tax dollars leave the state, in other words.  In North Dakota – or in any state with a state bank – the tax dollars paid by the citizens of the state remain in the state.

Every state takes in taxes and fees every year.  In North Dakota, these revenues are deposited in the state bank which, in turn, makes sure a large percentage of the money gets invested in the state’s economy.  And, the state bank gives a portion of its earnings back to the State Treasury. 

North Dakota is the only state that has had a continuous budget surplus since before the financial crisis.  They have had no bank failures in the past ten years.  Their mortgage foreclosure rate and credit card default is the lowest in the country.

A July 18, 2011 Associated Press newspaper article reports jobs in North Dakota increased by 61,000 since 2000.  That doesn’t sound like a lot of jobs, but remember, this state has a population of less than 700,000.   Of those jobs, 17,000 were created between 2008 and 2010 – a time when most states were bleeding jobs. 


The Federal Reserve System, a non-government private corporation has since 1913 been determining monetary policy for the United States.  A good case has been made by highly recognized, eminent economists around the world who say America’s monetary policy is destroying our economy.  A recent partial audit of the Federal Reserve shows this private corporation loaned $16 trillion in near zero interest secret loans to American and foreign banks AND businesses.

The usual culprits – Citigroup received $2.5 trillion; Morgan Stanley received $2.04 trillion, Merrill Lynch got $1.9 trillion and Bank of America got $1.3 trillion (since Bank of America and Merrill Lynch are the same corporation, B of A Inc. got the most money:  $3.2 trillion).

But it wasn’t just American bankers that got nearly interest-free loans.  About $3.08 trillion went to foreign financial institutions all over Europe and Asia.

The point is, while the Fed was making the low interest rate secret loans (for which U.S. taxpayers are on the line), 6.5 million American homeowners were suffering through delinquent and foreclosed mortgages.  Why are they in foreclosure?  Because the monetary policies of the Federal Reserve System caused a real estate bubble that resulted in the loss of hundreds of billions – perhaps more than a trillion – dollars in primary residential real estate values.  They are in foreclosure or behind in house payments because Federal Reserve monetary policies have resulted in a rotten economy.

Citizens in all states question the wisdom of the Fed’s monetary policies and the taxation of future generations of American children required to pay for the monetization of United States debt.  Citizens of the states have expressed concern that the Federal Reserve System is using their tax dollars to prevent the failure of banks in foreign countries while their American financial services system is being compromised by what Congress has chosen to call “too big to fail” banks.  They complain that they are being “fed to the wolves” or “thrown to the four winds of fate” by the policies of the Federal Reserve System.

Because the Federal Reserve System refuses to allow a complete audit of the trillions of American taxpayer dollars it uses for debt monetization purposes, it is impossible to evaluate precisely how that private corporation is spending America into debt.  The Federal Reserve System is a private corporation, not a part of the United States Government, and is referred to by many banking experts as a “cartel,” (as OPEC is a cartel).  The Federal Reserve System generates private corporate profits by collecting interest on the debt it is also responsible for generating… a clear “conflict of interest” because when the nation is in debt, the Federal Reserve earns profits on the interest paid on that debt.  The Federal Reserve System profits when America’s debt is high.  When debt is low, it does not.

In response to citizen concerns about what the people perceive as a federal financial system run amok, the State of Texas has approved that state’s right to print its own currency.  The State of Utah has approved the use of gold and silver coins in everyday commerce and business.  The State of Georgia has approved the right of bank clients to open deposit accounts using gold and silver coins.  In South Carolina, State Senator Lee Bright has introduced legislation that backs the creation of a new state currency to “protect the financial stability of the Palmetto State in the event of a breakdown of the Federal Reserve System.”

"If folks lose faith in the dollar, we need to have some kind of backup," North Carolina State Sen. Bright told the Spartanburg Herald Journal's Stephen Largen.

As of March 2010, there were twelve new declarations of State Sovereignty in progress in state legislatures around America.  They include Alabama, Nebraska, Rhode Island, Wyoming, Washington, Indiana, Kentucky, Georgia, Kansas, Missouri, Mississippi and Maryland.  Obviously, state legislators see potential problems.

Legislators responsible for the reforms required to best protect the citizens they are sworn to serve must choose carefully from a broad range of reforms.  Among those reforms must be a means by which bank lending to independent businesses can be stimulated.  A vast majority of taxpayers are employed by independent businesses which have been the hardest hit by the credit freeze caused by the reckless behavior of Wall Street banks and Federal Reserve policies.

As of March 2011, there were state-owned banking bills pending in eight states to either form or do feasibility studies to assist in forming legislation.  This year, bills have been introduced in Oregon, Washington, Massachusetts, and Maryland.  Bills from 2010 are pending in Illinois, Virginia, Hawaii, and Louisiana.  The Center for State Innovation in Madison, Wisconsin, was commissioned by Washington and Oregon to analyze the impact of a state bank in those two states.  The conclusion:  State-owned banks in Washington and Oregon would, CSI said, have a positive impact of substance on employment, new lending, and state and local government revenues.  In September 2011, the California State legislature passed state banking legislation and it is awaiting Governor Brown’s signature.

I began writing in my columns two years ago about how a simpler, more direct and less confrontational alternative than declaring sovereignty or legislating the state’s right to create its own currency exists for state legislators to take appropriate and immediate action to protect the citizens of their state from the clearly potential failure of the federal monetary system. 

I was the first banker and journalist to write about the need for state banks.  When I was a consultant (1979-1993), my daily rate was $2,000.  I was paid for my opinion.  In 2011 dollars, that amount would probably have increased to somewhere between $5,000 and $10,000 per day.  This is a no cost opinion:  I believe the establishment of a state bank offers the most important alternative state legislators can find.  It is a way to protect a state’s sovereignty without declaring it, and a state bank makes it possible for a state to issue its own currency (should it become necessary) without actually issuing it.  A state currency without a state monetary distribution system (state bank) is like an impotent bull:  Unable to perform.  More important, legislation declaring state sovereignty or the need for a state currency may further debilitate what little confidence remains in the federal system whereas the establishment of a state bank does not.

For example, currently the only way to clear checks written on deposits in federally-chartered (or state-chartered) banks is to utilize the check clearing system at the Federal Reserve System.  The Bank of North Dakota clears its own checks.  If a state declares sovereignty (as several have said is their right), it must be done both de jure ("according to law") and de facto – or, "in reality."  A state may say it is sovereign, but sovereignty must also be accepted by other nations and states.  For said declarations to hold legal weight and to be taken seriously nationally and internationally, the declaring (de jure) state must, according to international law, have a definable territory, it must have a governing body, and it must be able to exercise and control its own monetary power (de facto).  Any state can comply with the first two requirements (definable territory and and governing body).  Logic dictates that no state can exercise monetary power when tied to a failing federal system of finance and Federal Reserve Notes that may – or may not – maintain value.

That is the basis of the people’s concern for their economic well being.

One thing is absolutely certain.  Without a state bank, states have no alternatives should the federal system collapse.  The state system will collapse with the federal system.  We all hope that doesn’t happen, but the economy is not improving.  It gets consistently worse.  With a state bank, both state sovereignty and currency creation are possible.  What legislators need to think about is this:  Without a currency distribution system independent of the federal system currently in place, states have no alternatives but financial chaos available to them – and that is what they will get should the system fail.

In one of my editorials in News With Views (an Internet news service with a million weekly readers), I said:  “As of June 30, 2009, the Federal Reserve Bank of St. Louis said there were 6,898 commercial banks in the United States – but as of June 30, 1984, there were 14,369 commercial banks? In 1994, that number was pared down to 10,623. Now we have less than 6,898.”

Since local banks are a key to the ongoing economic stability and are often the sole source of independent business growth for communities, statistics indicate it is time for our legislators to look at lawful alternatives available to the state that can stimulate economic growth and taxpayer confidence.  Historic results over a period of 93 years at the Bank of North Dakota proves the value of state banks.

Of all the alternatives available, one fact stands out as identifiable truth:  States must be prepared to quickly come to the economic rescue of their citizens should the need arise.  The financial services industry currently creates an unsafe economic environment in which all alternatives must be kept open to states that want to serve the people they represent.  As it relates to the economic well-being of any state’s citizens, a state bank offers the least offensive alternative to the dangers of what may be a failing federal financial system while concurrently supporting all potential alternatives required to save citizens from extremely painful economic failure at the federal level.

As long as a State is tied to the federal system of finance, it is impossible to declare sovereignty or create a state currency because no monetary distribution system is available.

The United States is $15 trillion in debt.  We are spending $1.50 for every $1 in revenue we take in.  That is unsustainable.  Before any new dollar or Federal Reserve Note is printed, it is 46 cents in debt – and thus, it is not “a dollar” nor what the Federal Reserve purports a Federal Reserve Note worth $1.00.   I’m not a lawyer and don’t know the lawful implications of that, but I do know that if I turned a piece of paper into something and represented it has having the value of $1.00 and it was only worth 46 cents, I’d be arrested for counterfeiting.

Our problem in America today is too much centralized power.  The best way to solve that problem in the economic sector is to implement state banks… a system that decentralizes the power of the Federal Reserve System.

In short, without access to a state-owned system of banking similar to the only such system in the country – North Dakota – it is impossible to be properly prepared to protect any state’s citizens against the devastation that can result from a failure of the federal financial system.  Equally, at this time there is no legal reason barring any state from implementing a state bank similar to that 93-year old system in the state of North Dakota.


A state bank is owned by the public and is not a private corporation.  The banks that do business with the public are privately owned, just as they are now.  The state bank acts as an administrator, granting charters to banks and acting as a correspondent bank for them.

Banks doing business with loan, deposit and trust customers in any state would, under a properly-structured state bank system, continue to be privately owned.  The banks are privately owned but are chartered by the state rather than the Comptroller of the Currency in Washington, D.C.  That is the primary change that occurs when a state owns its own banking system:  The state, rather than the federal government, charters the state banks doing business in the state and the state establishes the qualifications private investor banks must meet to provide banking and other financial services to citizens.  The state establishes and/or approves acceptable loan policies at banks it charters.  The state bank becomes the correspondent bank for independently owned banks it charters.

Some states may try to structure a state bank for political or other purposes.  If a state bank is structured like a political toy rather than as a state bank, it will fail.  The mistakes made at the federal level that caused systemic failure must be eliminated from the state system.  They include:

1.           Fractional-reserve banking has played a huge role in creating too much currency from thin air; that, in turn, results in the inflation that has debased our currency. The only logical outcome to fractional-reserve banking is inflation.

              Inflation is not the result of an increase in the cost of good as much as it reflects a decrease in the value of the currency.  

I recommend a return to the lending policies in place during the 1970s and 1980s.  In the good old days, bank growth was dependent on bringing new deposits into the bank.  A bank could lend a percentage of its deposit base.  That percentage was sometimes determined by bank regulators… usually up to 70 percent of the deposit base, depending upon overall bank loan quality.  Banks make money on loans (loan interest) and lose money on deposits (they pay interest to depositors).  Forcing bank growth to occur on the basis of deposit growth is good… it means there is business development and new jobs in the community.  If those things aren’t there, bank growth through new deposits is not possible because new deposit accounts don’t appear when jobs aren’t being created.

Fractional-reserve banking makes bank growth dependent upon the extension of credit.  If a bank makes a million dollar loan, the Federal Reserve System makes it possible for the bank to lend $900,000; ten percent of the million dollar loan goes into the Federal Reserve System.  Thus, the name “fractional-reserve” banking.   In other words, because the bank made a million dollar loan, $900,000 of new currency has been created by the Federal Reserve fractional-reserve policies.  Creating money out of thin air results in reduced currency value and that, in turn, causes prices to rise… purchasing products with a currency that’s losing value requires more of the failing currency to purchase it.

The system of fractional-reserve banking must be kept out of the state bank system.  It is a major reason for the failure of the federal system and should not be brought to the state level.  It will, in the long run, cause them to fail, too.

A state bank administers the granting of state bank charters on the basis of the requirements established by the Advisory Boards created by the state legislature. 

A state bank is not, as many people think when they hear the words “state bank,” equivalent to “state-chartered banks” (which have been in existence for many years in most states but which are tied to the federal system of banking).

A state owned bank operates its own system of banking.  It grants member charters to independent banks (much like the Comptroller of the Currency grants national banking charters to national banks).  Though a state bank must comply with federal banking laws, the state bank, not the Federal Reserve System, establishes monetary policy for the financial institutions it charters.  A state bank may perform all functions currently performed for member banks of the Federal Reserve (such as check clearing) and the Federal Deposit Insurance Corporation (such as insuring customer deposits).  The Bank of North Dakota does both things for the state bank but its member banks must currently clear checks through the Federal Reserve Banks and deposits must be insured by the Federal Deposit Insurance Corporation (FDIC).  Should the federal system fail, both check clearing and deposit insurance could be included in the state system. 

A state bank can (and does, in North Dakota) function as a correspondent bank for its member banks.  It can write mortgages… and, in the current real estate market, a state bank can help establish a floor under the ongoing, downward spiral of real estate values.  There have been no bank foreclosures in North Dakota for the past ten years.  I recommend that state banks be prevented from selling real estate mortgages to Freddie Mac and Fannie Mae both of which sell mortgages to Wall Street banks where they are still, even after all of the trouble, included in mortgage-backed derivatives (which I term “worthless pieces of paper”).


A state bank is NOT the owner of state-chartered banks.  If it were, such a system of state-owned banks could be accurately called a “socialist banking system.” 

Properly structured state banks are not operated by politicians.  Rather, with a well-written legislative Act, the state requires the bank to be run by professional bankers under a well-controlled environment of positive regulation.  Since state bank employees are public servants, and since they are not directly involved in making loans to the public – that is done by the privately-owned independent banks serving the public – no bonuses, commissions or fees for loan generation are paid to state bank employees – or, to executive management of the bank.

State-owned banks, properly structured, do not compete with community banks.  Rather, they support them.  A state bank uses state funds (now kept in the state rather than being sent out-of-state to a “too big to fail” bank) to provide credit for local growth-based projects.  Currently, funds from state taxpayers leave the state and are leveraged for international investments.  This creates no jobs for state residents.

Neither does a properly structured state bank compete for consumer or commercial deposits.  The independently-owned banks chartered by the state handle those items – as they do now.  In North Dakota, less than 2 percent of BND deposits come from consumers.  Community banks have available to them municipal government deposits and can use the funds to create jobs locally because the BND provides letters of credit guaranteeing such loans.  As a properly-stated state bank Act reads:  “All state revenues must be deposited in the state bank.”

The Bank of North Dakota is a member of the Federal Reserve System.  It is a member because it chooses to use the convenience of Federal Reserve services available to it… not because it has no other alternative (like the other 49 states).  A state bank Act insures state bank deposits – the tax and fee dollars of the state’s taxpayers.

The Bank of North Dakota is run in a very fiscally conservative manner… it is not subject to outside interference by politicians with a special project they want to fund.  Credit policies chartered by state banks must be approved by a state bank advisory board.  Bank of North Dakota is not involved in speculative loans or derivatives and other risky ventures… nor should any state bank be.

State funds and tax monies are kept safe by a well-structured state bank.  Such banks should be self-funded.  Bank of North Dakota manages VA, FHA, and other federally-guaranteed loans that would otherwise go to large, out-of-state banks.

When local communities partner with a state bank, it allows independent banks to fund local projects which sustain economic development within the community.  The “too big to fail” banks have no interest in local communities.  Studies show that from 30 to 50 percent of public project costs are composed of loan interest paid.  Thus, the reduced cost of borrowing from a state bank can help fund infrastructure projects.

An interesting article from the Honolulu newspaper appeared on June 27, 2011.  It was a story about how the Hawaiian Bankers Association (the state association) opposes legislation being considered by that state’s legislature to implement a state bank.  The new banking system does bring down certain power structures – like the ties that exist between state banking associations and the American Bankers Association – and legislators need to be prepared for such resistance.  In North Dakota, their Bankers Association endorses the Bank of North Dakota.

It should be noted that North Dakota has the most local banks per capita and enjoys the lowest default rate on loans of any state in the nation.  Of the 93 banks doing business in North Dakota, 87 are state-chartered banks who have opted to become part of the new system – and who have prospered while other banks around the nation suffer lost profits of substance.  The other six banks are nationally chartered.

That is the ball on which everyone needs to stay focused:  The win-win situation that results from implementing a state bank – which is well worth the headaches of getting the job done (and done right).

Sunday, March 06, 2016


By Marilyn MacGruder Barnewall
March 6, 2016
And With It - A Negative Interest Rate Policy

According to Treasury Secretary Jack Lew who recently signed and sealed America’s current audited financial statements, as of 2015 the United States has $3.2 trillion in assets.

As other corporations do, the United States also listed its liabilities: $21.5 trillion. One does not need to be a mathematical genius to figure out that America’s net worth is a negative $18.3 trillion. We have $3.2 trillion in assets minus $21.5 trillion in liabilities.

In 2014, our negative net worth was $17.7 trillion and in 2013 it was $16.8 trillion. In other words, the United States is bankrupt. If you or I had five or ten times more debt than we had in assets, we would be in bankruptcy court.

Another thing corporations do is have their annual financial statements audited by an independent source... usually one of the major accounting firms. The federal government’s annual financial statement is audited by the General Accounting Office (GAO). This is done so people will more readily trust the numbers provided in the financial statements. Though it is part of the government, the GAO maintains a certain independence from governmental control.

Re the 2015 financials, the GAO told the federal government that it was on “an unsustainable fiscal path.” They also said that the federal government (that would be Congress which approves spending, the President whose policies are reflected in money approved to be spent, and the Department of the Treasury which generates the financial statements) often fails to provide “reliable and complete financial information – both for individual federal entities and for the federal government as a whole.”

Anyone who has been awake and who listens to statistical data about unemployment, job creation, inflation, cost of living and other data could have told them that.

Most of us remember that the Department of Defense in 2015 announced that it had over the past 20 years “misplaced” $8.5 trillion of our money. That’s your money and my money... and our children’s and our grand-children’s and great grand-children’s money -- and on and on for many generations.

Thus it will not surprise anyone to learn that the Defense Department was one of the government departments that failed to provide complete and accurate financial information for the financial statements. Until they find the missing $8.5 trillion, or until new people and procedures are put in place to track money spent, no additional funds should be sent to the DoD. Republican crowds attending presidential candidates’ functions loudly cheer when the words "rebuilding our military" are used. It does need to be rebuilt – but not until the system used to track costs has been audited and changed to keep honest records. If you'll recall the day before 9/11, then Defense Secretary Donald Rumsfeld announced that $3.1 trillion had been lost. To my knowledge, it's never been found.

The GAO evaluated Social Security and Medicare and other programs wherein Congress has told the American people that reductions will be made to save the programs. GAO says the weaknesses (meaning errors) they found in the stated reductions total $27.9 trillion. That means we are in much worse financial shape than they are letting on – and the debt they willingly admit to defines bankruptcy without the detected errors.

There are those reading this article who will respond by saying “Oh, they’ll just print more money. Nothing will change.” There are many who won’t read this article who would respond that way if they did read it. They represent the “something for nothing” crowd. They simply cannot conceptualize the idea that irresponsible federal spending – mostly designed to buy the votes of the poor and the disenfranchised (and illegal aliens and other non-hegemonic portions of society as described by Antonio Gramsci) – has bankrupted this once healthy economy. They cannot see in their minds the idea that when you borrow something, it must some day, some way be repaid.

The truth is, they are about to stop printing money so those who say “they’ll just print more money to cover the debt” are wrong.

The truth is, your bank is about to stop paying you the pittance they’ve been paying for your deposit dollars, calling it “interest.” They are about to start charging you money for the money in your bank accounts. It’s already being done in Europe and other parts of the world.

Bank of Japan's Governor Haruhiko Kuroda recently opted for negative interest rates.  It is
not a new idea. In the 1970s the Swiss government implemented negative interest rates because its currency was driven up in value and was causing inflation. Sweden used negative interest rates in 2009-10. Denmark used the concept in 2012. In 2014, the European Central Bank implemented a negative interest rate policy.

What is about to descend on your head is Negative Interest Rate Policy (NIRP). NIRP means that banks, rather than paying you interest on your deposits, will charge you a fee (probably a percentage of your deposit amount) for managing your money.

“Managing my money?” you may ask. “I manage my money; not my bank.”

Your reaction is likely: “I’ll just take my money out of the bank.” No. You won’t. Why? Because they are about to remove currency – actual money – from the marketplace. I believe we are about to switch to a digital currency -- and no, not Bitcoin.

Our economy is not recovering from the longest recession in history – some would call it a depression, but that would be too close to an honest assessment for this government to admit. The economy is going into a deflationary spin which would put us into a depression that would make the 1930s look like child’s play. When an economy deflates, there is no growth – no new business start-ups, no new jobs. People do not borrow and spend. Well, some people do – those who often have no alternative but credit cards to buy food and other survival items... like rent or car payments. People who use credit as a desperation move can seldom repay it and that does not bode well for the near-term future. There is a slowdown in real production of all kinds.

Until the 2007 economic debacle, we lived in an inflationary rather than a deflationary economy. During inflationary economies, people borrow money to invest in everything from the stock market to new business start-ups or company expansions. Consumers borrow to buy everything from cars and refrigerators to new homes and lawn mowers. Jobs are created even though the cost of everything is inflating. America’s horrendous debt burden combined with the real estate devaluation which led to the foreclosure debacle sent us into a deflationary period.

The Federal Reserve decided to fight deflation with an inflationary solution – quantitative easing – and it failed. Miserably failed. A lot of already rich people got richer, but no benefits to the economy or the people were realized. That’s the difference in crony capitalism and capitalism. This “mistake” was not an accident. It was planned.

When negative interest rates are imposed, it is a desperation move to avoid the failed government policies that have pushed the world into non-repayable debt. The greed of central banks worldwide has led to the coming demise of that system. The Keynesian model has proven to be a failed system. The central banks tried zero interest rates, then quantitative easing, and now negative interest rates. Nothing has worked. Hail Mary passes seldom do. In his book Currency Wars: The Making of the Next Global Crisis, Jim Rickards envisions the emergence of a world central bank as a result of central bank follies internationally.

I believe Rickards is correct. I further believe it has been the plan from the start. People tend to forget that for ten years I have been saying the objective of those seeking one world government is to put in place a world economic system because until that happens it is impossible to implement one world government. Once the international economic system is in place, creating a world government is child’s play. All that needs to be done once world monetary issues have been defined and implemented is which nations control which land.

To review, we have a nation that is bankrupt thanks to irresponsible and greed-based policies which utilized a zero-based Federal Reserve funds cost and that failed, quantitative easing which failed to stimulate the economy, and the powers that be will now very likely implement NIRP – negative interest rates on funds deposited in America’s banks... which will also fail. It is intended to fail.

Why is it intended to fail? There is little doubt in my mind that many who read this will call me a conspiracy nut. They called me that when in 2006 I predicted (in writing) the derivative mess, the 2007 resultant foreclosure mess that would result from MERS, the 2008 stupidity of zero-based central bank lending rates, TARP and quantitative easing, and now what I think they are about to do: The cashless society.

What is a cashless society? Here is a link to an article about the cashless society recently implemented in Ecuador. What negative interest rate policies will lead to is precisely what they have implemented (perhaps as a test?) in Ecuador.

Like everything else “they” do, this has been tested in various ways. The debit card issued to those receiving welfare benefits was part of the testing process. It was begun in the late 1990s. This article explains how it all began.

Rather than issuing a check or directly depositing welfare funds into a checking account, an amount is credited onto a computer system – we can call it "cybercash," -- no real cash involved. It's just digital money. It can be overseen by banks (though independent banks will fall by the wayside) or it can be overseen by the Department of the Treasury... or even the Federal Reserve System. The recipient of the funds uses the debit card to pay for food, clothes, etc. If it sounds like the government controls what may be purchased with the card that is correct. And now they are ready to expand the program from welfare recipients to you.

Bitcoin, another form of cybercash, was part of the test. Would people accept and use a non-currency form of “money”? Not only did they accept it, it took off like a rocket... until (as I said would happen) some controls were put in place that limited the use of Bitcoin and its stock fell in value as rapidly as it had risen. The test was a huge success.

There will be no cash. If you leave a tip for a waitress, it will have to be placed on the signed receipt which will be deducted from your bank account... or placed on a credit card. Your bank will automatically transfer your tip to the waitress to her bank account... and she will pay taxes on it. If you pay someone for mowing your lawn, it will be via check (no cash) or credit card (or your checking account debit card)... and it will be automatically placed in the mower’s bank account... and he or she will pay taxes on it. When you buy groceries, you will use a check, credit card, or the debit card. The government will have a complete record of your purchases (including cigarettes, alcohol, and other highly personal articles).

I repeat, there will be no cash. Everything you buy or sell will be done via your bank account and it will be tracked for tax purposes. If you can see a clear road to a barter system and an active black market, you’ve got the idea of what I’m explaining.

As I said, it is a desperation move made by a failed central banking system the greed of which convinced those who run it to believe the debt era could last forever.

If this does not give you a clear picture of just how far over the cliff the United States economy is, nothing will. Go to the beginning of this article and read about our debt. Read the article about the cashless society in Ecuador. Then prepare for the only logical future that can result from these economic circumstances. Start a new business that lends itself to being a good source for bartering for food, clothes and shoes.

NIRP and the cashless society will be about as successful as quantitative easing was. If you are prepared, you will make it through. If you are not prepared, you will curse yourself for not paying more attention.

© 2016 Marilyn M. Barnewall - All Rights Reserved