GUEST BLOG: Tadhg Stopford – A People’s Bank. A Profitable Bank. A Better Way.
Not-so-Kiwibank? Willis opens door to partial sale
“Kiwibank. It’s Ours” or so the advertisements go. But possibly not “ours” entirely for much longer with Finance Minister Nicola Willis open to floating part of the state-owned company.
The Bank that proves NZ is being Robbed.
A People’s Bank. A Profitable Bank. A Better Way.
Truth-Based Legal Revolution
What if I told you the most successful bank in the United States isn’t on Wall Street, but in Bismarck, North Dakota?
What if I told you this bank has no shareholders, no speculative gambling, no offshore transfers-and yet it turns a profit year after year?
What if I told you that North Dakota; rural, low-population state (796,568) with brutal winters; runs a state-owned bank that helps local businesses grow, partners with community banks instead of crushing them, and returns profits to the public?
You might think I’m describing a utopia.
But I’m not. It’s called the Bank of North Dakota (BND).
And it’s real. And it works.
Because it was born of populist revolt, to serve.
The BND was created in 1919 after North Dakota’s farmers were being strangled by out-of-state banks and monopolies. (Sound familiar? In 1936 New Zealand, the First Labour Government established the Reserve Bank of New Zealand for similar reasons; and today, for the same reasons of monoply extraction, we need to restore its power.)
In ND, people organised, won political power through the Nonpartisan League, and founded a public bank – not to redistribute wealth, but to retain it. Not to crush private banks, but to cooperate with them. Not to speculate, but to invest in the real economy.
And for over a century, BND has done just that.
That’s how John A. Lee funded the first state housing scheme through public credit creation by the Reserve Bank of NZ for public purpose.
Public credit creation was used to mobilise people and resources to achieve strategic goals. Housing. Employment. Hydropower. Education.
But, since 1989 the RBNZ has been handcuffed by the Public Finance Act and the Reserve Bank Act. Together, these strip us of power to develop our economy, and make us dependent upon commercial banks for loans. Ensuring our debt bondage is a liability, instead of a sovereign public credit/debt asset that builds ‘the wealth of nations’.
Makes you think huh? BND is very different to ANZ or Kiwibank or RBNZ
- It’s owned by the people. The State of North Dakota owns 100% of BND.
- All state revenues go into BND. Instead of enriching foreign shareholders, public money stays local. Here in Nz, I’m pretty sure westpac clips that ticket, for some reason.
- It partners with local banks. It co-lends and guarantees loans, helping small banks lend more, not less. Which, amazingly, leads to more economic activity.
- It’s profitable. Every single year. Since 1919. (BND 2024 Annual Report)
- It serves the real economy: Agriculture, infrastructure, student loans, housing, small business.
- It even stepped up in 2008 and 2020, delivering local relief faster than the federal government during crisis. North Dakota is the only state where local banks have flourished in recent decades, theirvstrength lying in the BND that backs them.(Institute for Local Self-Reliance).
No casino. No derivatives. No moral hazard.
Just a public bank doing its job. Making sure an economy works, instead of pimping it out.
So why doesn’t the RBNZ do this?
Why doesnt New Zealand, Australia, the UK, 49 of 50 U.S. states, replicate this model?
Why do they all pretend it’s not possible? Even when their own writings confess that they can? …See RBNZ Money Creation, Bank of England Money in the Modern Economy, Fed Chair Ben Bernanke on 60 Minutes, 2009) RBNZ even recently admitted that creating a third of GDP in Covid (was it ninety billion?) had *proven the effectiveness of public credit creation in cases of ‘market failure,*Point 6 (LSAP=QE=Public credit creation)
When markets crashed, RBNZ created billions to buy bonds from banks – but still won’t fund, offer, or admit that we can fund hospitals or housing. The system saves capital, not citizens.
So, if it works. Why is our Reserve Bank of New Zealand handcuffed and blinded, when it was founded in 1936 specifically to serve public purpose through credit creation? And how is it we all have the wrong idea about money creation?
Why do we all think that banks lend money that people save; instead of understand that banks invent money out of nothing?
Amusingly, because money being created out of nothing sounds so silly, the technical professional phrase for money creation is the Latin ex nihilo.
Which means, “out of nothing” 
So why has NZ dropped our economic and banking pants since the 1980s ?
Why are public funds handed to private banks, who create credit out of nothing, lend it back to us, and charge interest? How does that benefit Nz?
Why is credit creation outsourced to for-profit lenders who inflate asset bubbles while starving the real economy?
Why are politicians so eager to privatise everything except the profits of private banks?
We’re told the government should “stay out of banking.”
But BND is a government bank. And it works.
So who is running this country for whose benefit? We are led by public representatives, yet they do not seem to serve the public interest as much as cartel interests.
Why do politicians say “NZ has no money. Govt finances are like a household without enough income. We need more taxes, but people pay too much tax”?
It doesn’t make sense.
If the public understood that ‘our household’ owns a bank, they’d know RBNZ could:
- Lower borrowing costs
- Fund infrastructure without debt traps
- Partner with local banks to grow lending
- Return profits to the public while growing the real economy
…then every finance minister and banker in the current parasitic system would have to answer some uncomfortable questions.
Like:
- Why do we borrow from banks that create money out of nothing?
- Why not create public credit ourselves?
- Why does our state starve schools, hospitals, and infrastructure, while claiming “there’s no money”?
- Why do we pay billions to private financiers for projects we could self-finance through a sovereign public bank?
- Why are we running deficits, selling assets, and cutting services when we own the printing press?
It’s Time to End the Farce
We’ve been lied to.
North Dakota proves the model works.
And so did the RBNZ – before 1989 – when we invested in ourselves and delivered some of the world’s best housing, infrastructure, and education.
The truth is: Banks create money.
This is not a conspiracy theory. It’s official. It’s foundational.
But that sacred knowledge – that we, the public, empower credit creation – has been hidden from us.
Buried under ideology; like “it’s an immutable law of economics” Christopher Luxon
Obscured by jargon; like “there is no magic money tree” Chris Hipkins
Kept behind the curtain. Finance Minister Nicola Willis and Deputy PM David Seymour talked up the prospect of another $20 billion-plus in Government spending cuts yesterday, with Willis saying those worried about a Government-cost-cutting-to-
Our Finance Minister and DPM are being untrue. If credit creation drops, it doesn’t matter how low interest rates are. Because the monetary economy will still be shrinking.
But shrinking the economy can be used to justify further ‘reform’ or privatisations. So, if you’re cynically minded, there’s potentially a motive beyond ignorance; and as prof R Werner outlines in “Princes of the Yen”, politicians and technocrats have form in selling out their nation. (2023 edition)
Are we being exploited deliberately? Or accidentally? Either way, this is waaaay worse than underarm bowling.,
But the solution isnt radical.
The solution is functional capitalism with a moral spine.
What Adam Smith called “virtue and prudence.”
The BND/ 1936 RBNZ model can provide credit in service to the citizen, not just extraction for the already rich.
So it’s time we asked:
Why do our governments serve bankers, not citizens? Why have bankers started becoming politicians?
Why must profits go offshore while:
- Schools crumble
- Hospitals ration care
- Infrastructure decays
- Productive industries are starved?
The answer Is not austerity. It’s Sovereignty.
The Bank of North Dakota shows what financial sovereignty looks like.
If one tiny, rural U.S. state can do it, so can we.
And if we don’t?
Then we are choosing poverty by policy.
Servitude by ideology.
And theft by omission.
We are the ultimate source of credit.
Private banks are merely licensees, backstopped by RBNZ; which we own.
Imagine the dividends if we ran this country like we cared.
Imagine the outcomes if we played in the markets to win? Instead, right now, in monet terms, its as if we want to win the RWC but wont let the All Blacks on the field. Its a mindboggling choice, and it can only continue for as long as we dont understand.
So, each one teach one. Then another, and another. That is how we win
Theres a Truth-Based Legal Revolution brewing, join the fight for sovereignty, justice, and sanity.
I just got kicked off a Helen Clark Foundation zoom this morning for raising these fact based points and questioning why we insist on sabotaging our own economy and refusing ourselves investment. We cannot, it seems, expect honest progress from anyone in the establishment; until our voices are unignorable, and the facts widely known.
So, share this Substack. Forward it. Study it. Lets improve things.
Tadhg Stopford is a Historian and Teacher. Join him at www.thehempfoundation.org.nz. Support change by purchasing at www.tigerdrops.co.nz
Can we just swap you out for Luxon right now?
No election just have the corporate-speak empty suit escorted out of the Beehive and we wheel you in right past him – to be honest most people in our shared ‘post-news vacuum’ probably wouldn’t even notice that there had been a change made.
Great idea – the swap meet at the top. Wheelchair out with somnolent PM covered with richly worked blanket to keep out the cold for a brief walk, and shortly after a person in a wheelchair covered in same type blanket wheeled in and up to the PM’s office where he would be closeted in some confidential meetings while the real PM or previous, is flown to his home in Hawaii ad greeted with a kiss and a lei. Why would he want to come back to Kiwiland. Leave us to scrub round in the dirt for worms just as we love!
Great stuff Tadhg. Money, and banks, should work for the people, not our usurious enemies. The same principles inspired the Alberta Treasury Branches under the Social Credit party in Alberta, Canada.
The time was right for BND in 1919 with the populist Nonpartisan League holding a majority in the state legislature and they had a desire to keep the predator NY and Chicago banks away from the farmers at the time.
I can’t imagine any politician in this country has any such desire.
In fact, if you look at the behaviour of our reserve bank, you will note that it is exactly the same as every other country’s reserve bank.
So in 2022 they all (with the notable exception of Japan) raised interest rates even though they knew it would cause a crippling recession.
There’s a reason all the RB governors meet at the end of every August at Jacksons Hole, Wyoming, to be schooled by the Fed on the coming years priorities, and the actions the RB governors will be taking.
Independent my ass. The whole system is designed and run by a few to enrich the few at the expense of everyone else, and any assumption of sovereignty is an illusion.
As Peter Thiel and others are well aware, the global citizen is sovereign now, countries are just their play things.
Not that this couldn’t change, but you need to understand the scale of the issue before you address the problem. It is not a matter of right v left, it is them v us.
And unless you’re a billionaire or have some desirable physical attribute that can be monetised, you ain’t in that club John Key so lovingly refers to.
Better study Sun Tzu and see what he would do in these circumstances. We can’t go straight at anything involving power, have to find ways around it.
Yes I remember the rural bank and the housing corporation (i think thats what it was called ) who lent government money to farmers and house buyers for 3% which never changed from one year to the next .Thats when NZ was doing well as a country and a society .No homeless sleeping in shop door ways and as Muldoon used to say he knew the few unemployed by their first names because they were few and far between .
Inevitable really – when one is as useless as Willis (I mean which of us has lost the country $half a billion just by cancelling the rail ferries? That gal makes Luxon look like fucking Einstein!).
Utterly corrupt and incompetent governments need to steal money from somewhere. Hitler stole it from the Jews. Stalin stole it from the Kulaks. Willis will steal Kiwibank and anything else she can pry loose, because her crazed ideological policies are no more workable than those of the aforementioned gentlemen.
Hope you’re ready or the sugarbag years.