Is There A Safe Place For Your Money?


safe moneyHow to Survive the Demise of the Federal Monetary System


by Marilyn MacGruder Barnewall


So many people ask:  “Where can I put my money?  The banks aren’t safe because of the ‘bail-ins’ like they had in Cyprus where they used bank customer deposits to pay national debt.  Under America’s Dodd Frank Bill, my deposits belong to the bank, not to me.  If the bank makes bad investment decisions, my money is used to pay for their mistakes.  The government’s coming after pension money and many cities are going bankrupt.  People once employed by those cities have lost most of their pension benefits.  After Roosevelt confiscated gold in 1933, I’m sure not going to put my gold in a safe deposit box!  Where is a safe place to put my money?”

I used to have an answer to those questions.  My favorite personal investment was tax liens.  By investing in them I was able to give people who couldn’t pay their taxes a three year grace period to raise the money to pay their taxes – to save their homes – and there was a 7 to 10 percent return on my investment each year.  But, since the MERS (mortgage electronic registration system) fiasco and since mortgage-backed derivatives have prostituted county property records and any mortgage written since 1995 may have been included in a derivative which may mean not being able to get clear Title to a property… I’m staying away from real estate and no longer recommend it.

In short, there really is no good answer for the average person to the question, “What can I do with my money?”  Foreign currencies are good… well, some of them are (but you’d better know what you’re doing).  Commodities futures are good – inflation is sure to cause huge price increases in the cost of food and metals – but again, you’d better know what you’re doing or you may end up with a front yard filled with copper or wheat.

We tend to think the financial corruption began in the 1990s, but it began far earlier than that – and a great deal of it came as a result of The Federal Reserve Act of 1913. 

Place:  Carnegie Hall, New York City

Date:   October 19, 1912

Event:  Woodrow Wilson remarked:  “Some of the biggest men in the United States in the field of commerce and manufacturing are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.”

Place:  Letter to Colonel Edward Mandell House

Date:   November 21, 1933

Event:  President Franklin Roosevelt confirmed what Wilson said when he wrote to Col. House: “The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson….”

My answer to the questions asked above may surprise you.  The most important financial tool you can have to survive the coming crash is – a State Bank like the Bank of North Dakota.  It is the only State Bank in the United States.

The American system of finance has for years been devastated by many things.  Our financial markets have become totally corrupted and the Rule of Law designed to protect us from financial fraud is Missing in Action.  From Bernie Madoff, then Jon Corzine at MF Global (who are amateurs by comparison to Goldman Sachs and JPMorgan Chase), there is no Rule of Law, no contract law, nothing.

According to the Washington Post, JP Morgan Chase “is staring down six separate investigations by the Justice Department, four by the Securities and Exchange Commission, and three by the Commodity Futures Trading Commission.”  For example, JPMorgan was forced by the Federal Energy Regulatory Commission to repay $125 million – the amount by which JPM defrauded consumers for getting power plants into a scheme that caused the fraud – plus an additional $285 million (which for JPM is about one day’s net revenue). 

Then we have China which, in 2012, was accused by US authorities of attacking our financial infrastructure.  Later in that same year of 2012 and without a whimper of protest, China was given access to extremely sensitive financial intelligence.  Then the White House and the Congress didn’t protest when the Federal Reserve permitted three of China’s largest banks to open bank branches in the U.S. which gives the Chinese access to the Fed’s money transfer system – Fed Wire.

The Federal Reserve System   

Most Americans are aware that the Fed is a privately-held corporation, not a government-owned organization.  Some Americans even know the Fed was put in place by the unlawful passage of The Federal Reserve Act of 1913 – 100 years ago as of this December 23rd.  For those readers who doubt that statement, please read Article 8 of the First Amendment which firmly places responsibility for the nation’s monetary system in the hands of the US Congress (Article 10 has a few things to say about who runs our monetary system, too).

We know what needs to be done to change the Constitution:  1)  Congress must pass an Initiative that clearly states the constitutional changes being proposed; and, 2) The Initiative must be sent to the states to be voted on and either approved or disapproved by the people.  When we decided to change the voting age from 21 to 18, that’s the way it was done.  The Constitution cannot be changed simply because Congress passes the Federal Reserve Act of 1913.  Thus, the Federal Reserve System in unlawful.  No Initiative was ever passed by the Congress and the people never voted for or against an initiative to change the constitutional requirements involving our monetary system.

Not only that, the Federal Reserve System is ineffective relative to serving the needs of the people.  Rather, it serves the needs of Wall Street and too big to jail banksters.  I offer as evidence of that statement that since the founding of the Federal Reserve the United States money supply had increased by about 12,500 percent.  That is why the 2013 dollar is worth from 2 to 6 cents by comparison to the 100 cents it was worth at the time the Fed was founded.  Too many people are unaware that the reason we pay almost $4.00 a gallon for gasoline isn’t because the cost of gas is going up.  It’s because the value of the dollar is going down.  A currency decreasing in value defines inflation.

Few people would argue that America’s monetary policy or its currency today is sound, yet no one does anything about it.  And there is something that can be done about it.   What’s the old saying?  Power tends to corrupt and absolute power corrupts absolutely?  Lord Acton said that, I believe.  He also said, “Liberty becomes a question of morals more than of politics.”  He was right.  Our biggest problem right now is that our leaders have no moral compass, just political ideology and the desire to do whatever it takes to get elected for one more term of office.

Almost four years ago, I began writing about the Bank of North Dakota.  There’s nothing too unusual about that since I write about banking and the economy.  But the more I investigated this subject, the more I realized that the concept of a State Bank could save the American people from economic travesty.  As a former banker, I found the subject fascinating.

What is absolute power?  It is centralized power.  To decentralize power, it must be redistributed.  It must be spread away from a central location or authority into the hands of the many rather than the few.

If you have wondered how to decentralize the power of the Federal Reserve System, if you’ve thought about what would happen if the banking system failed, you need to know about State Banks.  A State Bank could literally mean the difference between surviving and not surviving a national financial catastrophe.

Please read the following six paragraphs.  After you read them, please watch the 12 minute video to which a link is provided about publicly-owned banks (State Banks).  See if you can catch the errors in the video based on my description defining State Banks.  The video is very well done by the Public Banking Institute.

Here is an accurate definition of a State Bank:

A State Bank is owned by the lawful tax-paying residents of a State.  It is managed by the State on behalf of the people. A state-owned bank is not subject to the federal government in the same way independent banks which deal with the public are.


A State Bank is funded by the taxes (income, property, sales, etc.) and fees (license plates, driving licenses, court fines, etc.) paid to the state.  A State Bank keeps those funds within the state to promote the economic well being of lawful residents.  The 49 states that do not have a State Bank place state taxes and fees into banks that are members of the federal banking system – even state-chartered banks (which have been around for a long time) are governed by the federal system.  And yes, so are credit unions.  The funds generally leave the state and the biggest banks – with headquarters in New York, San Francisco and Charlotte, NC – get the Lion’s share of state deposits (which tend to end up being used in population centers where the most votes can be purchased… it’s how bridges to nowhere get built).


A State Bank acts as an administrator and as a correspondent bank for the independent banks which serve the public (in the same state).  The independent banks, not the State Bank, serve the public by taking deposits and making loans. The job of a State Bank is to manage the state taxes and fees which fund it. The job of the independent banks licensed by the State Bank is to serve the personal and business needs of the people who are lawful residents of the State.


Though the independent banks are by law required to run their banks in compliance with federal laws and bank regulations, the State Bank, which does not generally do business with consumers and businesses, is not. In the only state-owned bank in America, the 94-year old Bank of North Dakota, the BND performs for its self functions normally provided by the Federal Reserve System… e.g., it clears its own checks.  It does not clear checks for the state’s independent banks (which serve the public).


Without a State Bank, no state is capable of generating its own currency or of switching its financial system to one backed by gold and silver (or any other commodity) because if the federal banking system fails there is no distribution system in place – unless you have a State Bank.  If the federal system fails, there is no way to clear checks – so how can you cash your paycheck?  There is no credit card system in place to bill credit card holders for charges when made so you will be unable to use debit and credit cards.  Though at the current time the Bank of North Dakota does not perform those functions for its state-chartered banks, because it clears its own checks it would be able to adapt its system to do so quickly if needed.


A State Bank makes it possible for a state to create its own currency, but only if it first declares sovereignty and secedes from the Union. As long as a state remains a member of the Union and as long as the federal government is financially sound, federal law proclaims that no currency other than that issued by the United States Government may be used. Thus, the only way a state can create its own currency is if the federal system fails, the state secedes, and a new state currency is issued.  As stated above, without a State Bank no state is capable of generating its own currency and when the federal system fails, it will be too late.  It’s a little more complicated than snapping your fingers.  It takes time to get a State Bank implemented.

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Here is the link to the 12 minute video provided by the Public Banking Institute.  As you watch it, see if after reading my definition of a State Bank, above, you can find the errors.

The Bank of North Dakotaimage[1]

The video is excellent in almost every way…a quality piece of work.  But it makes it sound as if the deposits in the independent banks with which the public does business are placed in the State Bank and are, thus, safe.  That is untrue.  All independent banks, including the independent banks on street corners throughout North Dakota, function under the federal system as long as there is a federal system.  That is the law in every state, including North Dakota.

I encourage you to watch that video again because aside from this single error, it is exceptionally good.  The gentleman speaking towards the end of the video gets it right.  The municipal and state deposits which are in the State Bank are safe.  They are not part of the federal system.  But if the federal system fails, the individuals who are bank depositors in North Dakota will face the same penalties everyone else faces.  Well, if a major bank fails the Bank of North Dakota could immediately declare its independent banks as belonging to the state’s bank and place all depositor dollars in the State Bank.  To do that, secession would almost have to occur.  Would North Dakota secede from the Union?  I have no idea.  But at least they have that alternative.  If your state doesn’t have a State Bank, you don’t have that alternative.

The concept of a State Bank is, I believe, the most critical survival factor in the coming financial meltdown.  It’s not a matter of “if.”  It’s a matter of “when” it happens.

Because State Banks are so critical to our economic survival, it is very important for you, the citizen patriots of America, to know how such banks should be chartered and structured.  It’s not hard and it’s not dull.  But the survival value of State Banks will be lost if they are implemented as political toys at the state rather than the federal level.  You need to make sure fractional-reserve banking is disallowed.  You need to make sure that if your state government wants to create its own currency – a fiat currency backed by nothing – that it is disallowed.  You need to make sure that all state funds deposited in the State Bank can only be used for township, city, county and state needs, and not for political payoffs.

It is important to support the establishment of a State Bank in your state… but make sure you are supporting the right structure, the right kind of charter, and that you do not allow the things that have caused the federal system to fail to be brought to your State Bank.  The two primary things you want to avoid are fractional-reserve banking and fiat currency.

I have written the legislation for Colorado’s State Bank and will be glad to share that information with legislators around the country.  If you want the straight scoop straight from the horse’s mouth, you might enjoy a Mother Jones 2009 interview of Bank of North Dakota’s president, Eric Hardmeyer.   I have also made available to readers expert witness testimony I wrote for state legislators who contact me for information about how to create a State Bank. 

There are solutions to our problems.  State Banks is one solution – but it won’t implement its self.  You may have to carry a petition to get it on your ballot.  First, you’re going to have to submit an Initiative to your state’s Secretary of State – and your state banking association will challenge you.  The big banks in your state will spend big advertising bucks to beat you at the ballot.  Be sure your Initiative is written in compliance with state law.

In short, if you want the nation to survive the coming economic crisis, you need to get informed about State Banks and you need to offer time and effort to get a State Bank implemented by your legislature and/or by voters.  If you have to by-pass the legislature to get the job done, do it.


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Marilyn MacGruder Barnewall began her career in 1956 as a journalist with the Wyoming Eagle in Cheyenne. During her 20 years (plus) as a banker and bank consultant, she wrote extensively for The American Banker, Bank Marketing Magazine, Trust Marketing Magazine, was U.S. Consulting Editor for Private Banker International (London/Dublin), and other major banking industry publications. She has given speeches to bankers worldwide. She has written seven non-fiction books about banking and taught private banking in Singapore; also at Colorado University for the American Bankers Association. She has authored seven banking books, one dog book, a biography, and two works of fiction (about banking, of course). She has served on numerous Boards in her community. Barnewall is the former editor of The National Peace Officer Magazine and as a journalist has written guest editorials for the Denver Post, Rocky Mountain News, and Newsweek, among others. On the Internet, she has written for News With Views, World Net Daily, Canada Free Press, Christian Business Daily, Business Reform, the Post & Email, and others. She has been quoted in Time, Forbes, Wall Street Journal, and other national and international publications. She can be found in Who's Who in America, Who's Who of American Women, Who's Who in Finance and Business, and Who's Who in the World.