It's Not Libor Stupid, Central Banks Are The Problem
The Libor scandal is about to get a whole lot worse. And, that’s the good news.
Not only are at least twenty more big banks under investigation as part of a massive fraud to manipulate interbank lending rates that affect some $800 trillion in loans and derivatives, but the Bank of England is about to take center stage in the scandal.
And that’s bad news for central banks around the world.
Well, actually, it could be good news, as in really good news if it’s the beginning of the end of what central banks do to manipulate free markets to the benefit of their only real constituents, the world’s big banks.
First the good news.
It’s already come out that traders at Barclays with huge derivatives positions leaned on co-workers who sit on “panels” that submit internal bank borrowing cost data to Thompson Reuters, who averages the middle lot of submissions to determine Libor (London Interbank Offered Rate) “fixings” (not my word, but actually the established nomenclature for what it apparently is that they do…as in “fix” rates) all under the auspices of the British Banking Association.
What’s good is we now know for a fact that the traders (crooks?) were aided and abetted by their co-workers, the submitters (crooks?), who were overseen by managers and top executives, who design most of these schemes (crooks?), and were all blessed by the British Banking Association, an illustrious association of 200 some-odd banks, whose many members (crooks?) are panel members submitting crooked (no question mark necessary) data.
Still don’t get why that’s good news? Because it’s proof there are crooks out there and this time it’s easy to see where the “fix” actually occurs. It’s also good news because according to one multinational banking executive, just quoted in the Economist, it’s “the banking industry’s tobacco moment.”
He was referring to the potential mountain(s) of litigation being drawn up already to claim that gross manipulation of interest rates caused billions, maybe trillions, of dollars of harm to borrowers and financial players of all stripes. Back in 1998 big tobacco had to settle class-action suits that cost them over $200 billion.
The bad news is the Bank of England, one of the world’s stalwart and oldest central banks, is about to face its own potential Lehman moment (at least we can hope). That’s on account of the fact that Paul Tucker, deputy governor of the Bank of England (and its supposed next top dog), is going to have to come clean in front of Parliament very shortly.
Mr. Tucker is apparently on record (according to Bob Diamond’s phone call notes) suggesting that the Bank of England wanted Barclay’s to manipulate it’s Libor submissions downward so as to not panic counterparties and the country who might view tight interbank lending conditions as a sign of stress across the entire banking system.
So, here’s why the bad news for the central bank (encouraging, no, make that, demanding fraud) is really good news for free markets.
Central banks have done nothing to countermand the trend (nothing but encourage) leading to big banks getting bigger; so big, in fact, that now all of the big banks around the world are all too-big-to-fail.
The bigger the world’s banks are (bankers want size, because more size equals more power to price, to manipulate markets, and to pay bigger bonuses) the more important central banks become, both to the big banks, nations, and the global economy.
Central banks are the saviors of big banks that get in trouble, especially when economies and systems are leveraged for profits that backfire and they all have to be bailed out.
Central banks are supposed to be above what’s going on below their ivory towers, but, in fact, they are the puppets being manipulated by the big banks. It’s a case of the tail wagging the dog. [Ron: NAH! Not even close! The Central Banks and in particular the US Federal Reserve and the Bank of International Settlements (BIS) - and indirectly, the Bank of England - are OWNED and controlled by the OWNERS of the Big banks. In effect, they, and the ECB which is similarly controlled by the Rothschilds and their ilk, control and coordinate the entire global banking scam in the interests of their OWNERS ie those who also OWN and control the Big Banks. Get it? Got it? Good! And guess the identities and "tribal" affiliations of those OWNERS? YEP. You guessed it! They are AshkeNAZIS aka Khazars or Jews]
Why are central banks pouring money into banks, really? Why aren’t governments printing money to pour into ailing economies but aiding and abetting central banks instead?
It’s because central banks are independent supra-national bodies who have been ceded monetary power by governments almost everywhere to benefit banks and bankers the world over, who are their only constituents, and for all intents and purposes, effectively “own” legislators and governments.
They’re pouring money into banks to keep them solvent. That’s what central banks are there for. The banks aren’t lending the money (massive reserves are sitting on balance sheets [Ron: Well, NO! Actually those funds are obtained at betwen 0.75% and ZERO percent from the Central Banks in Europe and the US and are then being "lent" back to national treasuries at, say 3% pa GUARANTEED. THAT "carry trade" is making Big Banks RICH and funding huge BONUSES for theie executives and traders while the so-called "Bailout Funds are NOT being lent to "mainstreet" and the general public.] to shore up appearances) because they need it to meet reserve requirements and offset the illiquidity evident in the interbank lending market…the same interbank (Libor) market that the Bank of England wanted to make look more liquid than it was viscous back in 2008. [Ron: There isn't just ONE scam, there are scams within scams!].
But it gets worse. What will happen when the “multiplier effect” takes effect? I’m talking about the potential for massive inflation when all those huge quantities of reserves (stimulus) get lent out instead of shelved on balance sheets? How about massive inflation. [Ron: Actually the humungous inflation that this enormous money creation and supply heralds is only slowly leaking out as it surfaces in bonuses, dividends and such, within the executive banking and corporate communities. Because only the super rich are getting it, the prices of basic items cannot increase too dramatically without starving the general population and causing chaos and revolutions. Which, no doubt, is on the future agenda.].
Heaven help us if all these macro crises are fixed quickly. The flood of idle cash and credits globally will make past inflationary bursts look like a 40-yard dash compared to miles and miles of potential problems ahead of us.
We need free markets not manipulated markets. We need to break up all the world’s big banks so they can fail when they overleverage themselves, and entire systems, nations, economies and the global economy aren’t all brought to their knees. [Ron: WRONG AGAIN! We need to ensure that governance units (however described) create money under close societal supervision; and rigidly control and transparently audit its supply and use. IF that is not done the banksters will always suborn the process and exploit and enslave humanity, AS THEY ARE CURRENTLY DOING!].
If we break up all the too-big-to-fail banks we won’t need central banks. We can go back to what are supposed to be free markets dictating interest rates and creating honest, open economies and opportunities everywhere.[Ron: Actually what we MUST aim for is a global money creation and usage system that doesn't require interest (usury) at all. Money is, or should be, only a tool used to facilitate trade and exchange of goods and services, and if the process is properly done BY communities FOR communities, there is no need for it to be provided as debt ie with a requirement that interest be paid on it. IF YOU CANNOT AMEND YOUR PERSONAL PARADIGM TO UNDERSTAND AND ACCEPT THIS NOTION YOU ARE PART OF THE PROBLEM and you deserve to live in the bankster manipulated world you are now in. In which event I suggest that you stop whinging about it since it is obviously what you want.].
[Colour fonts, bolding and comments in square brackets added.].
Another Domino Falls in the LIBOR Banking Scam: Royal Bank of Scotland. See: http://abundanthope.net/pages/Political_Information_43/Another-Domino-Falls-in-the-LIBOR-Banking-Scam-Royal-Bank-of-Scotland.shtml
LIBOR: the 'mega-scandal of all mega-scandals' is upon us. See: http://abundanthope.net/pages/Political_Information_43/LIBOR-the-mega-scandal-of-all-mega-scandals-is-upon-us.shtml
Exposure of Banker Corruption. See: http://abundanthope.net/pages/Political_Information_43/Exposure-of-Banker-Corruption.shtml
It's over for the banking cabal. 4.jul.2012. See: http://abundanthope.net/pages/Political_Information_43/it-s-over-for-the-banking-cabal-4-jul-2012.shtml
Barclays blames 'senior Whitehall figures' for Libor scandal as Bob Diamond resigns - live. See: http://abundanthope.net/pages/Political_Information_43/Barclays-blames-senior-Whitehall-figures-for-Libor-scandal-as-Bob-Diamond-resigns---live.shtml
A new nightmare on Wall Street? U.S. banks face criminal probe into global interest rate-fixing scheme as Barclays blows the whistle on America's financial giants. See: http://abundanthope.net/pages/True_US_History_108/A-new-nightmare-on-Wall-Street-U-S-banks-face-criminal-probe-into-global-interest-rate-fixing-scheme-as-Barclays-blows-the-whistle-on-America-s-financial-giants.shtml
Constitutional Court Desecrates Our Rights And Undermines The Will Of The People. See: http://abundanthope.net/pages/Political_Information_43/Constitutional-Court-Desecrates-Our-Rights-And-Undermines-The-Will-Of-The-People.shtml