State Owned Banks: DBA vs Separate Corporation, Regulatory Oversight and Risks

By Michael Sauvante •

According to North Dakota’s statutes, BND is a DBA of the state. If a state bank is chartered as a DBA of the state (which is a government corporation), then the assets and liabilities of the bank become synonymous with the assets and liabilities of the state (i.e., its balance sheet), thereby enabling the state to use all of its assets to determine the amount of new credit it can generate for the state’s benefit. No assets would have to be assigned, pledged or transferred into the bank. This would be similar to an existing corporation obtaining a bank charter (like a license) from a regulatory agency, wherein all the corporation’s existing assets would automatically be considered the assets of the bank once the charter has been granted.

Read the entire article here.

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9 Responses

  1. I remember when they started the first tax Rebate in 2007 , like 600 bucks for a married couple , 300 for single , and Bush said that with the way the trade Policy was structured where the USA did not enforce the trade rules on china pegging their currency value at 10 cents to our dollar and sucking all the industry out of the USA , like happened in all the other parts of the world too where their currency value was higher than China , and without trade duties being paid by the Multi-National Big Box Retailers like Wallmart , KMart , etc etc which lobby Congress to keep the trade policy this way , Bush said I don’t know what Good the Tax Rebate will do to stimulate the Economy because the Money won’t Stay in Circulation in the USA very Long , I think Bush Said something like 2 maybe 3 times and then the Money flows out of the USA and over too China or India , those countries being the Lowest valued currency value , but that the only form the money was coming back to the USA was in the form of a Debt guarantee by China buying T-Bills to back up the Trade Deficit so the Federal Reserve could print more money for the whole game to continue . Why did they just Keep practicing a Trade Policy that they Knew was a Broken Policy ???
    Gresham” Law of the 14th Century Comes to mind when describing this fundamental Flaw in allowing different valued Currency trade in the same markets without some form of counter balance to regulate the way the lower valued currency will drive the higher valued currency down in value and that causing a disadvantage to the labor force in that market place and it ending up causing a devaluing effect on the overall economy of the higher valued currency , effecting primary and secondary wealth creation overall depressing the country down to the level of the lowers valued country that manipulated their currency value lower .
    If we would have had Trade Duty on Imported products and then use that duty as a way to negotiate a balance trade deficit we could have had a cost adjusted value to our economic trend that would have kept up with the trends in inflation over the past 18 years of this trade Policy and overall incomes would be higher today to deal with what looks like a Volatile tide of Inflation coming fast upon us in food prices . Plus the manipulation all these years could actually have suppressed our True need for expansion in supply overall , and now this is forcing volatility in commodities and food being the most harmful to humanity . Failure in our Policy makers where its was on purpose to gain a greater control of the populous through repressive means economically , or they are just victims of their own manipulation by the Multi-national Corporate donors that have donated Billions over the years to the Political sphere , either way this is a Travesty to the People that just live day to day .

  2. Did a flawed Trade Agreement over the past 18 years cause this debt leverage to build up ?????
    I couldn’t believe my eyes when I read this link …….

  3. Take a look at this too , it is evidence of how the trade deficit build-up over the years of this 18 year Flawed Trade policy was covered up with the Derivatives Trade , the black hole of Debt Build ….all for what ?? this economic function was designed to Extract the wealth in the world markets because even the consolidator of the most wealth in this shell game did not redistribute the bounty to humanity in their own country equally . and certainly the countries like the USA and EU just supplemented their loss in overall income revenue streams to keep up with the food and energy inflation over the years was done with lines of credit , not true value income increases . This all smells of a scheme of wealth consolidation for a greater purpose , because to see this deficit building and building for all this time and not doing anything to counter this brings reason to question true motive here don’t you think ??
    At the Bottom of this article it has previous and next page articles you can click on to expand the related material reading for a greater concept of the economic discussion .

  4. Ellen I see you contribute to this Media Source , so they must be legitimate , so Is this 2008 article based on fact ? and If so what are the ramifications on our Economic Recovery ? Will the author be considered a possible threat for the written material here ?

  5. Ellen maybe you can knit together this concept to what you are designing in the banking system ?
    Heres some more thought to go with the way to use a Home Mortgage to Recover the Economic System in America .

    Why Can’t a Home Buyer have their Payment on their Home be considered a Contribution to their IRA or 401K retirement account ? Then in their retirement years they do a Reverse Mortgage and can access the money for their retirement and Medicare needs ?

  6. Heres some more thought to go with the way to use a Home Mortgage to Recover the Economic System in America .
    Why Can’t a Home Buyer have their Payment on their Home be considered a Contribution to their IRA or 401K retirement account ? Then in their retirement years they do a Reverse Mortgage and can access the money for their retirement and Medicare needs ?
    To build on this concept further , why not have the vehicle set up so that all dollars contributed by the home owner be a true value accumulated into the home that is always a constant value regardless of real estate value fluctuations in market value , then this way the base value of real estate would be always with a basic value so a economic collapse cannot happen as mood and risk in the mind of the Investors ebb and flow through the climates of economic trends .
    Also to help recapitalize the real estate market with a Base Value , and in conjunction with the New Banking requirements of 1/3 rd down qualifications for new home loans , we need to reset a base value under every home loan in America with a 1/3 rd value in the real-estate loan based off the current value of the Mortgage debt , and this will revalue the real estate market and Under Pin the Muni Bond market with some stability as well .
    This would put a floor of value under pinning the overall markets and stabilize or at least have a better stabilizing effect on markets so Government bailouts are not as apt to be needed like we have seen in this current economic bubble . This would also allow for some better stability in the fixed asset classes as Interests rates would be effected by this as well .

  7. This Is why we need to look Hard at Changing the way we Consider a Home Loan payment an actual Contribution to a Retirement Account !!!

    Why Your IRA Is Almost Certainly Already ‘Invalidated’ By The IRS – And How To Avoid The Dire Financial Consequences .

  8. Now what if we were to start state Banking that could allow for the Home loan to be paid back into the retirement account that could be a catalysis for this kind of economic function that could generate the fee structure to support the banking enterprise but allow for the borrower to generate a retirement in the home they buy that when they retire can reverse mortgage the home loan to allow for retirement and Medicare costs be paid in installments , all according to tax ramifications and such ?? fund state banks though commerce clause ; see the link here ; .

    The way we can convert the debt into equity could be considered this way ;

    Use this link below to enact these new laws .

  9. This otherwise excellent piece by Michael Suavante unfortunately has one very substantial omission. He describes at length the limits on lending imposed by capital requirements, which are easily met in a state-owned bank, as Ellen Brown has pointed out. But he says nothing about the need for liquidity that leads all commercial banks and the Bank of North Dakota to limit their lending to about their deposit balances.

    This is the real crux: how much money can a public bank lend? In a nutshell, it can lend an amount about equal to its deposits, no more.

    The Bank of North Dakota has deposits of about $4K per capita. Any other state could assume reaching that level after a few years. This yields a simple way to put a number on how much a public bank can lend.

    All talk about lending 9X deposits is poppycock. That banks “create money from nothing” using “the magic of fractional reserve banking” is true but irrelevant. Introducing these concepts is distracting and only adds confusion to the very good arguments for estabishing public banks: quit wasting interest payments by shipping them out of state, and instead use that money for the state budget.

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