<html><head><meta http-equiv="Content-Type" content="text/html charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;">Good morning, Agnes,<div>Thanks for the Ellen Brown articles. I wholeheartedly agree.</div><div>Hopefully, you’ll be meeting with the new Board of Supe, Woodhouse. If he’s for a public bank—great—we have our three votes. If he’s not, this is something the Community Rights Network should take on. We’re on a roll and once people understand how good this would be for our county, I’m sure we could get the signatures for the ballot and educate folks to vote.</div><div>In the previous election, we had an 18% turnout of voters; in this past election, we had 24%. We can keep increasing voter turnout if we have measures that will make a difference for we the people.</div><div><span class="Apple-tab-span" style="white-space:pre"> </span><a href="http://ellenbrown.com/2014/10/12/building-an-ark-how-to-protect-public-revenues-from-the-next-meltdown/">http://ellenbrown.com/2014/10/12/building-an-ark-how-to-protect-public-revenues-from-the-next-meltdown/</a></div><div>Onward,</div><div><div apple-content-edited="true">
<span class="Apple-style-span" style="border-collapse: separate; border-spacing: 0px;"><span class="Apple-style-span" style="border-collapse: separate; color: rgb(0, 0, 0); font-family: Verdana; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-align: -webkit-auto; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-border-horizontal-spacing: 0px; -webkit-border-vertical-spacing: 0px; -webkit-text-decorations-in-effect: none; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; "><div style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; "><span class="Apple-style-span" style="border-collapse: separate; color: rgb(0, 0, 0); font-family: Verdana; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-align: -webkit-auto; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-border-horizontal-spacing: 0px; -webkit-border-vertical-spacing: 0px; -webkit-text-decorations-in-effect: none; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; "><div style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; "><span class="Apple-style-span" style="border-collapse: separate; color: rgb(0, 0, 0); font-family: Verdana; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-align: -webkit-auto; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-border-horizontal-spacing: 0px; -webkit-border-vertical-spacing: 0px; -webkit-text-decorations-in-effect: none; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px; "><div style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; "><div><div style="font-size: 12px; ">Linda</div></div><div><div style="font-size: 12px; "><br></div><div style="font-size: 12px; "><br></div></div></div></span></div></span></div></span></span></div><div><div>On Nov 8, 2014, at 12:19 PM, <a href="mailto:agnes@mcn.org">agnes@mcn.org</a> wrote:</div><br class="Apple-interchange-newline"><blockquote type="cite">---------------------------- Original Message ----------------------------<br>Subject: [Fwd: [Occupymendocino] Fwd: From Ellen Brown a must read: Why<br>public banks NOW and a road map to get there]<br>From: <a href="mailto:agnes@mcn.org">agnes@mcn.org</a><br>Date: Sat, November 8, 2014 12:16 pm<br>To: <a href="mailto:CRNMC@lists.mcn.org">CRNMC@lists.mcn.org</a><br>--------------------------------------------------------------------------<br><br>Hi, Dear Friends,<br> Here is one of the reasons why we should be working to urge the<br>County Board of Supervisors to pass an ordinance to establish a<br>Mendocino County Public Bank very soon. We need all crn help to<br>protect our county's public funds.<br> Also CJHolmes, who two years ago, worked with Occupy Mendocino and<br>she produced 2DVDs explaining how big banks planned the foreclosure<br>debaucle leading to the 2007-08 economic crisis. She has sent another<br>warning about the end of silver coins and a shortage of silver,<br>further how we need to be producing things we can exchange without<br>money, as happened in Greece which was asset stripped sending the<br>country into bankruptcy.<br><br>from Agnes Woolsey<br><br>This is from Ellen Brown, the founder of the American public banking<br>movement and its most thoughtful advocate. A must read.<br><br>Building an Ark: How to Protect Public Revenues from the Next Meltdown<br><<a href="http://ellenbrown.com/2014/10/12/building-an-ark-how-to-protect-public-revenues-from-the-next-meltdown/">http://ellenbrown.com/2014/10/12/building-an-ark-how-to-protect-public-revenues-from-the-next-meltdown/</a>><br>Posted on October 12, 2014 by Ellen Brown<br><br>Concerns are growing that we are heading for another banking crisis, one<br>that could be far worse than in 2008. But this time, there will be no<br>government bailouts. Instead, per the Dodd-Frank Act, bankrupt banks will<br>be confiscating (or âbailing inâ) their customersâ deposits<br><<a href="http://ellenbrown.com/2013/04/29/bail-out-is-out-bail-in-is-in-another-argument-for-publicly-owned-banks/">http://ellenbrown.com/2013/04/29/bail-out-is-out-bail-in-is-in-another-argument-for-publicly-owned-banks/</a>><br>.<br><br>That includes local government deposits. The fact that public funds are<br>secured with collateral may not protect them, as explained earlier here<br><<a href="http://www.webofdebt.com/articles/baliin.php">http://www.webofdebt.com/articles/baliin.php</a>>. Derivative claims now get<br>paid first in a bank bankruptcy; and derivative losses could be huge,<br>wiping out the collateral for other claims.<br><br>*I*n a September 24th article titled* â*5 U.S. Banks Each Have More Than 40<br>Trillion Dollars In Exposure To Derivatives<br><<a href="http://theeconomiccollapseblog.com/archives/5-u-s-banks-each-have-more-than-40-trillion-dollars-in-exposure-to-derivatives">http://theeconomiccollapseblog.com/archives/5-u-s-banks-each-have-more-than-40-trillion-dollars-in-exposure-to-derivatives</a>><br>*,* Michael Snyder warns:<br><br>Trading in derivatives is basically just a form of legalized gambling, and<br>the âtoo big to failâ banks have transformed Wall Street into the largest<br>casino in the history of the planet. When this derivatives bubble bursts<br>(and as surely as I am writing this it will), the pain that it will cause<br>the global economy will be greater than words can describe.<br><br>The too-big-to-fail banks have collectively grown 37% larger since 2008.<br>Five banks now account for 42% of all US loans, and six banks control 67%<br><<a href="http://theeconomiccollapseblog.com/archives/we-are-in-far-worse-shape-than-we-were-just-prior-to-the-last-great-financial-crisis">http://theeconomiccollapseblog.com/archives/we-are-in-far-worse-shape-than-we-were-just-prior-to-the-last-great-financial-crisis</a>>of<br>all banking assets.<br><br>Besides their reckless derivatives gambling, these monster-sized banks have<br>earned our distrust by being caught in a litany of frauds. In an article in<br>*Forbes* titled âBig Banks and Derivatives: Why Another Financial Crisis<br>Is Inevitable<br><<a href="http://www.forbes.com/sites/stevedenning/2013/01/08/five-years-after-the-financial-meltdown-the-water-is-still-full-of-big-sharks/">http://www.forbes.com/sites/stevedenning/2013/01/08/five-years-after-the-financial-meltdown-the-water-is-still-full-of-big-sharks/</a>>,â<br>Steve Denning lists rigging municipal bond interest rates, LIBOR<br>price-fixing, foreclosure abuses, money laundering, tax evasion, and<br>misleading clients with worthless securities.<br><br>Particularly harmful to local governments<br><<a href="http://www.webofdebt.com/articles/interestrateswap.php">http://www.webofdebt.com/articles/interestrateswap.php</a>> have been interest<br>rate swaps misrepresented as protecting government agencies from higher<br>rates.<br><br>Yet as Michael Snyder observes:<br><br>At this point our economic system is so completely dependent on these banks<br>that there is no way that it can function without them. . . . We are<br>steamrolling toward the greatest financial disaster in world history, and<br>nobody is doing much of anything to stop it.<br><br>*Sidestepping the Steamroller*<br><br>California Governor Jerry Brown sees it coming. Rather than rebuilding the<br>stateâs crumbling infrastructure, rehiring teachers and other public<br>employees, and taking other steps to restore the Golden State to its former<br>prosperity, he has proposed a constitutional amendment<br><<a href="http://ellenbrown.com/2014/05/06/robbing-main-street-to-prop-up-wall-street-why-jerry-browns-rainy-day-fund-is-a-bad-idea/">http://ellenbrown.com/2014/05/06/robbing-main-street-to-prop-up-wall-street-why-jerry-browns-rainy-day-fund-is-a-bad-idea/</a>><br>requiring<br>all excess state revenues to go into a rainy day fund to prepare for the<br>next crisis.<br><br>But there is a better way forward.<br><br>In North Dakota â the only state to post a budget surplus every year since<br>2001 â the state owns its own bank. When the state last went over-budget in<br>2001 due to the <a href="http://Dot.com">Dot.com</a> crisis, it merely issued itself an extra dividend<br>through the Bank of North Dakota â the only state-owned depository bank in<br>the country â and the next year it was back on track.<br><br>Other local governments would do well to follow suit, not just for the<br>promising profit potential, but as protection against a âbail inâ of<br>public<br>deposits.<br><br>Forming their own banks can also protect local governments from a looming<br>and unaffordable rise in municipal bond interest rates. State treasurers<br>fear that the Fedâs September 2014 exclusion of municipal bonds<br><<a href="http://ellenbrown.com/2014/09/08/preparing-to-asset-strip-local-government-the-feds-bizarre-new-rules/">http://ellenbrown.com/2014/09/08/preparing-to-asset-strip-local-government-the-feds-bizarre-new-rules/</a>><br>from<br>the category of âhigh quality liquid assetsâ that big banks must hold<br>will<br>drive up bond rates, as it shrinks the market for those bonds and drives up<br>the interest required to attract buyers.<br><br>There is also the big money local governments lose to Wall Street just in<br>fees. A 2013 study found that the city of Los Angeles spends over $200<br>million annually on big bank fees<br><<a href="http://d3n8a8pro7vhmx.cloudfront.net/seiu721/pages/1/attachments/original/1395715866/No_Small_Fees_A_Report_by_the_Fix_LA_Coalition.pdf?1395715866">http://d3n8a8pro7vhmx.cloudfront.net/seiu721/pages/1/attachments/original/1395715866/No_Small_Fees_A_Report_by_the_Fix_LA_Coalition.pdf?1395715866</a>><br>and<br>management â more than its budget to maintain its extensive streets and<br>highways.<br><br>In a recent press conference<br><<a href="http://www.publicbankinginstitute.org/santa_fe_mayor_discusses_the_promise_of_public_banking">http://www.publicbankinginstitute.org/santa_fe_mayor_discusses_the_promise_of_public_banking</a>>,<br>Mayor Javier Gonzalez of Santa Fe raised provocative questions facing all<br>elected officials today. He said:<br><br>Right now our bank is Wells Fargo. They serve the City according to our<br>contract. But they also take city revenues, taxpayer dollars, and they use<br>those taxpayer dollars as part of their loan portfolio that goes to places<br>outside of Santa Fe and certainly outside of New Mexico. And when you<br>think of that most basic concept of taxpayer money being used to earn<br>revenues for national banks that have reduced their small business lending<br>by 53%, you have to pause and wonder â is this the best structure for our<br>community?<br><br>Addressing these concerns, Mayor Gonzalez has launched a formal process to<br>study the feasibility of a city-owned bank of Santa Fe. Public banking<br>efforts are also underway in other cities and states.<br><br>*How to Start a Bank Overnight*<br><br>Forming a state or municipal public bank need not be slow or expensive. An<br>online bank could be run out of the Treasurerâs office and operational in a<br>few months. And the bank could be turning a profit immediately â without<br>spending the local governmentâs own revenues.<br><br>How? The way Wall Street does it <<a href="http://www.cnbc.com/id/100497710#.">http://www.cnbc.com/id/100497710#.</a>> with<br>our public deposits and investments: by leveraging. We could reclaim those<br>funds and put them to work for our local economies.<br><br>The bank could be capitalized with a bond issue (borrowing from the<br>public), and this capital could be leveraged into a loan portfolio that is<br>about eight times the capital base. The bond issue could be financed with<br>1/8th of the interest accruing from this portfolio. The remaining 7/8th could<br>be pocketed as profit.<br><br>This profit could be earned immediately and without risk, by buying<br>municipal bonds rather than issuing loans. That move could also help<br>municipalities, by guaranteeing that their bond rates remain low in the<br>face of threatened interest rate rises on the private market.<br><br>*How to Start a Bank at Virtually No Cost or Risk*<br><br>To demonstrate the safety and viability of the model, the bank can start<br>small and build from there. For startup capital<br><<a href="http://www.huffingtonpost.com/2010/03/19/how-to-start-your-own-ban_n_497261.html">http://www.huffingtonpost.com/2010/03/19/how-to-start-your-own-ban_n_497261.html</a>>,<br>a new bank needs anywhere from a few million to $20 million nationwide.<br>(The amount varies from state to state.) To be cautious and conservative,<br>however, letâs say $40 million.<br><br>Many cities have this money available in ârainy dayâ or reserve funds.<br>Many<br>others have substantial investments, often underperforming, that could be<br>more responsibly invested as an equity position in a bank. In California,<br>for example, a whopping $55 billion is languishing in the Treasurerâs<br>Pooled Money Investment Account, earning a mere 0.23% interest<br><<a href="http://www.treasurer.ca.gov/pmia-laif/performance/pmia-laif_perform.pdf">http://www.treasurer.ca.gov/pmia-laif/performance/pmia-laif_perform.pdf</a>>.<br><br>Moving a portion of those funds into the stateâs own bank would just be<br>good portfolio management. State pension funds are another investment<br>option.<br><br>If surplus funds are not available, capital can be raised with a bond<br>issue. (That is how the Bank of North Dakota got its start in 1919.) Assume<br>the interest due on these bonds is 3%. The local governmentâs cost of funds<br>will be $1.2 million annually.<br><br>At a 10% capital requirement, $40 million is sufficient to capitalize $400<br>million in loans. But again assume the bank is started conservatively at a<br>20% capitalization, for a loan portfolio of $200 million.<br><br>To make those loans, the bank will need deposits. These can be acquired<br>without advertising or other costs, by moving $200 million out of the local<br>governmentâs existing deposit account at JPMorgan Chase or another Wall<br>Street bank. (In North Dakota, all of the stateâs revenues are deposited by<br>law in its state-owned bank.) Assume the new bank pays 0.3% interest on<br>these deposits, or $0.6 million annually as its cost of funds.<br><br>To satisfy the 10% reserve requirement for deposits (something different<br>from the capital requirement), $20 million of this deposit pool would be<br>held in reserve. The remaining $180 million are counted as âexcess<br>reserves,â which can be used to make an equivalent sum in loans or bond<br>purchases.<br><br>Assume the excess reserves are used to buy local municipal bonds paying 3%<br>annually. The return to the bank will be $5.4 million less $0.6 million in<br>interest on the deposits, for a total of $4.8 million annually.<br><br>To recoup the cost of the bond issue, $1.2 million can be paid from these<br>profits as a dividend to the local government. The bank will then have a<br>net profit of $3.6 million annually; and this profit will have accrued to<br>the local government as the bankâs owner, without needing to advance any<br>money from its own budget.<br><br>What if the state needs its deposits for its budget?<br><br>That is the beauty of being a bank rather than a revolving fund: *banks do<br>not actually lend their deposits*, as the Bank of England recently<br>acknowledged<br><<a href="http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf">http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf</a>>.<br>Rather, they*create *deposits when they make loans. If the state or local<br>government needs more cash for its operating expenses than the bank has<br>kept in reserve, the bank can do what all banks do: it can borrow. And if<br>it has grown to be a large bank, it can borrow quickly and cheaply â from<br>other banks through the Fed funds market at 0.25%, or from the money market<br>at 0.15%.<br><br>A smaller public bank might want to keep a larger cushion of deposits in<br>reserve for liquidity purposes. If it keeps 30% in reserve, in the above<br>example $140 million would be left to invest in bonds, generating $4.2<br>million annually in interest. Deducting $1.8 million as the cost of<br>servicing deposits and capital, the bank would still generate $2.4 million<br>in profit, while providing a safe place to park public revenues.<br><br>What of the bankâs operating costs? These can be kept quite low. The Bank<br>of North Dakota operates without branches, tellers, ATMs, retail services,<br>mega-salaries or mega-bonuses. All those saved costs fall to the bankâs<br>bottom line.<br><br>Ballpark operating expenses for a small but growing public bank with a<br>President, Chief Financial Officer, Chief Lending Officer, Chief Credit<br>Risk Management Officer, Compliance Officer, and the systems required to<br>support a banking function are estimated at under $1 million per year. A<br>start-up focused on municipal bonds could be operated for even less. This<br>expense could come out of the initial $40 million in capitalization, again<br>without impairing the local governmentâs own operating budget.<br><br>*Manifesting the Bankâs Full Potential*<br><br>Once a charter has been obtained and sound banking practices have been<br>demonstrated, the capital ratio can be dropped toward 10%. When the bank<br>has built up a sufficient capital cushion, it can begin to work with<br>community banks and other financial institutions for the broad range of<br>commercial lending that creates jobs and prosperity and generates profits<br>as non-tax revenue for the municipality, following the Bank of North Dakota<br>model.<br><br>The public bank can also invest in infrastructure loans to the state or<br>local government itself. Interest now composes about half<br><<a href="http://ellenbrown.com/2014/06/01/infrastructure-sticker-shock-financing-costs-more-than-construction/">http://ellenbrown.com/2014/06/01/infrastructure-sticker-shock-financing-costs-more-than-construction/</a>><br>of<br>capital outlays for public projects. Since the local government will own<br>the bank, it will get this interest back, cutting infrastructure costs in<br>half.<br><br>These are just a few of the possibilities for a publicly-owned bank, which<br>can provide security from risk while generating a far greater return on the<br>local governmentâs money than it is getting now on its Wall Street deposit<br>accounts. As we peer into the jaws of another economic meltdown, moving our<br>public funds into our own banks is an investment we can hardly afford not<br>to make.<br><br>________________________<br><br>Ellen Brown is an attorney, founder of the Public Banking Institute<br><<a href="http://publicbankinginstitute.org/">http://publicbankinginstitute.org/</a>>, and author of twelve books, including<br>the best-selling Web of Debt <<a href="http://webofdebt.com/">http://webofdebt.com/</a>>. In The Public Bank<br>Solution <<a href="http://publicbanksolution.com/">http://publicbanksolution.com/</a>>, her latest book, she explores<br>successful public banking models historically and globally. Her 200+ blog<br>articles are at <a href="http://EllenBrown.com">EllenBrown.com</a> <<a href="http://ellenbrown.com/">http://ellenbrown.com/</a>>.<br><a href="http://ellenbrown.com/2014/10/12/building-an-ark-how-to-protect-public-revenues-from-the-next-meltdown/">http://ellenbrown.com/2014/10/12/building-an-ark-how-to-protect-public-revenues-from-the-next-meltdown/</a><br>Mike<br>Mike Krauss<br>Chair, the Pennsylvania Project<br>Director, the Public Banking Institute<br>Skype: mikekrausscomments<br>www.publicbankingpa.org<br>TO UNSUBSCRIBE: send an email to occupymendocino@lists.mcn.org put<br>"Un-Subscribe me" in the Subject line.<br>For listserv problems please contact: listmanager@mcn.or<br><br><br>_______________________________________________<br>crnmc-media mailing list<br>To post to list, send e-mail To: crnmc-media@crnmc.org<br>To Subscribe, Unsubscribe, Change Settings, or View Archives go to<br>http://lists.crnmc.org/mailman/listinfo/crnmc-media<br></blockquote></div><br></div></body></html>