Sunday, February 3, 2013


(Barnewall Note: The following information was provided to attendees of the Colorado Republican Assembly in April 2012 by me.)


The Federal Reserve is a private corporation owned by private investors, and though federally chartered, is “federal” in name only.

The United States of America is $15 trillion in debt and counting, with no apparent end in sight; national debt is forcing negative repercussions within the State of Colorado.

The federal government is currently spending $1.50 for every $1.00 of revenue collected which, in essence, renders debt repayment impossible because every dollar that is printed to pay the debt immediately creates 50 cents of more debt.

The Federal Reserve both regulates monetary policy for and profits from the debt of the United States which creates a severe conflict of interest in eliminating the debt because by doing so corporate profits to the Federal Reserve are eliminated.

The current economic model of “debt capitalism” implemented by the Federal Reserve has caused the only downgrade of the credit rating of the United States in history.

As a result of the economic crisis, certain of America’s largest banks with branch locations in Colorado have been deemed “too big to fail.”

To cover their losses, certain of America’s largest banks have become dependent upon perpetual bailouts funded by taxes collected from the America people and owed by the posterity of Colorado residents.

Banks chartered by the federal system dominate finance in Colorado and should the federal banking system fail so, too, will banks chartered and regulated by the federal system. If the federal system fails, the Bank of North Dakota will be able to replace bank services lost… check clearing, credit card access, etc. Economic chaos can be avoided if the state of Colorado creates a state bank.


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

A. Unemployment (as of March 2012)

National 8.3%
North Dakota 3.1%
Mesa County, CO 19.50%

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 worst economy in recent history, North Dakota had its largest state budget surplus in history while other states functioned in the red… some very deeply.

D. North Dakota annually tops the list of state economies.

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 percent drop in 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
$25 million reduction, corporation taxes
$2.125 million tax reduction, financial institutions (a drop 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 in the nation.

To duplicate the successful operation of the Bank of North Dakota, the specific purpose of which has been to provide an in-state repository for the holding, management and distribution of the fees and taxes collected in North Dakota to invest in North Dakota businesses and communities, other states should create a state bank that can in no way be used as a political toy. To achieve that, the founding documents of the Bank of North Dakota and updates to its policies and procedures must be utilized by legislators when a state bank is created.

The Bank of North Dakota is limited in its scope and purpose. It does not compete with independent banks, it supports them. It administers and oversees and acts as a correspondent bank for independently-owned banks that deal with the public. It makes funds available for state, city and county government operations to the benefit of the people of North Dakota.

The Bank of North Dakota is prohibited from competing in the private sector with privately-owned banks in North Dakota operating under state or federal charter; and has specifically created a structure within its State Bank Board that guarantees its Bank will function on behalf of the people and not be used as a political tool.

The Bank of North Dakota is attributed with being the cause for the North Dakota economy topping the list of state economies year after year, and with being the only State that has had a continuous budget surplus since before the financial crisis of 2008; and while the rest of America has been enduring a recession, the state of North Dakota has enjoyed the largest budget surplus in its history.

Some people try to eliminate the Bank of North Dakota as the reason for the State’s success, pointing to the Bakken Oil Fields as the state’s source of economic strength. Montana, however, has the largest portion of the Bakken Oil Fields, not North Dakota. In 2011, Montana faced a $62.5 million general fund budget deficit by June 30th. Its unemployment rate is 7.2 percent. Alaska produces twice as much oil as North Dakota but its unemployment rate is 7.2 percent. It also has budget problems. In fact, according to the publication State Budget Solutions, debt in all of the states in 2012 will exceed $4 trillion – but not in North Dakota.

The Bank of North Dakota is attributed with why in 2011 the People of North Dakota saw almost $500 million returned to them in income and property tax cuts and will enjoy a 30% decrease in tax liability when combining 2009-2011 tax cuts.

The Bank of North Dakota is attributed with being the reason why North Dakota has the lowest foreclosure rate, the lowest credit card default rate, and the lowest unemployment rate of any State (3.1%) in the nation.


A state bank is owned by the public and is not a private corporation. It is, thus, a public bank.

The banks 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. 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.

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