This New Libor 'Scandal' Will Cause A Terrifying Financial Crisis

Two years ago, a major scandal rocked the world after it was revealed that big international banks had long been manipulating the Libor interest rates to fraudulently boost their profits. As outrageous as the Libor rate-fixing scandal was, it pales in comparison to another Libor “scandal” that is occurring at this very moment, but has received virtually none of the attention that it rightfully deserves. The ultimate fallout of this much larger, little-known Libor “scandal” will be nothing less than an international financial crisis.

The next two sections explain the basics of Libor and the rate-fixing scandal, but can be skipped for those who are already familiar with it.

This New Libor 'Scandal' Will Cause A Terrifying Financial Crisis

The above listed article is in Forbes. I think a lot of us remember the original Libor scandal a little while back. This is the new one! If you look at the charts in the articles, you will notice that rates are being held low, very very low and a correction should be forthcoming very soon. In each of the previous chart examples, a rise in the Libor rate after a low interest rate hiatus created a collapsing economic bubble.

I have no idea how long the PTB can keep those rates down, but, in the interest of a global takeover, I am quite sure they won't wait too much longer. 2014 might very will be the year of hope and change! I hope we can survive it and we are left with more than change in our pockets.

ETA: Just thought I would add this from Reuters, the stage is being set it appears;

Fed's Fisher wants October end to QE3; sees no 2014 rate hike

Cheers - Dave

a reply to: bobs_uruncle

I think they are trying to entice a controlled correction because the stock market is too high. The financial system does that from time to time. The influential rich must have pulled a lot of their money out already so Forbes is just calling last call.

originally posted by: rickymouse
a reply to: bobs_uruncle

I think they are trying to entice a controlled correction because the stock market is too high. The financial system does that from time to time. The influential rich must have pulled a lot of their money out already so Forbes is just calling last call.

If you mean full blown anarchistic raping of the entire financial market as controlled, I agree ;-) I just added the Reuters article to the OP concerning the ending of QE3 and no QE4 and how Fisher doesn't forsee a rate hike. I almost laughed myself off my chair when I read that initially.

Cheers - Dave

a reply to: bobs_uruncle

It is controlled because the people on top already have their money pulled out....keeping them on top no matter what. It is the upper middle class that looses everything and also the lower upper class. Some of the lower middle class will lose their residences but they don't have that much savings anyway, other than possibly smaller retirement investments.

That is what I refer to as controlled, remember, lots of stock brokers are not allowed to invest in the market much.

The burst is coming. I dont see how to manage such enormous debt without something giving.

Nothing happened last time and nothing will happen again, sadly. The bankers have all the control they need to do whatever they want. Since we can't do jack squat about it, it will continue to get worse until the house of cards gets blown down and all hell breaks loose. Fun times for all.

I would love to be wrong but I don't see this ending well.

originally posted by: TheSpanishArcher
Nothing happened last time and nothing will happen again, sadly. The bankers have all the control they need to do whatever they want. Since we can't do jack squat about it, it will continue to get worse until the house of cards gets blown down and all hell breaks loose. Fun times for all.

I would love to be wrong but I don't see this ending well.

Last time a lot of people lost a lot of value in their 401k's, other retirement plans, mutual funds, their houses/property, their jobs and the stock market in general. I don't know if I would call that nothing happened. You can keep reinforcing a containment system, but eventually an ever increasing pressure is going to come up against that immovable container and something is going to break. The longer one waits while the pressure increases, the bigger the bang at the end when everything lets go.

From the two articles in the OP (and everything else I have read today), I kind of see the makings of the perfect financial storm brewing and ready to hit about mid-fall when interest rates correct upwards of 10% which will drive contraction and hyper-inflation. Personally, I hope the PTB wait till spring to launch this next round of financial warfare, as going into winter under a financial crisis won't be pretty. I think it may be sooner however, as Soros has bailed and many players have followed his lead.

Cheers - Dave

a reply to: bobs_uruncle

You misunderstand, I meant nothing happened to the bankers who ripped off millions of people out of, probably, billions of dollars. Not even a slap on the wrist.

Short of a worldwide revolution to oust the International Banking Cartel from it's perch, nothing will change except like you said, it will get worse for us - not for them. Which isn't really change, just more of the same but that's nitpicking.

originally posted by: TheSpanishArcher
a reply to: bobs_uruncle

You misunderstand, I meant nothing happened to the bankers who ripped off millions of people out of, probably, billions of dollars. Not even a slap on the wrist.

Short of a worldwide revolution to oust the International Banking Cartel from it's perch, nothing will change except like you said, it will get worse for us - not for them. Which isn't really change, just more of the same but that's nitpicking.

Gotcha, wasn't sure if you were being sarcastic, facetious or simply stating a known condition. It seems we are all saying the same thing, now I guess we just have to organize enough to bring their machine to a screeching halt. I hope everyone knows how to network over HAM and shortwave because the first trick in a confidence game like this one would be limiting communication and I am quite sure the PTB have someone sitting right beside the internet kill switch.

Cheers - Dave

a reply to: bobs_uruncle

Apparently the similarities between Libor and the Royal Bank of Scotland here in the U.K. are startling. RBS ofc have been given the biggest bail out of all time (and another may be required) & the auditors who work for them (Deloitte) weren't even dismissed for their part in creating the major debt. Mis-seling & mis-pricing were al deliberate actions, those at the top have made a fortune out of the rest of us.

In a roundabout way, the U.K. government is responsible for financial fraud against the U.K. people.

originally posted by: Zcustosmorum
a reply to: bobs_uruncle

Apparently the similarities between Libor and the Royal Bank of Scotland here in the U.K. are startling. RBS ofc have been given the biggest bail out of all time (and another may be required) & the auditors who work for them (Deloitte) weren't even dismissed for their part in creating the major debt. Mis-seling & mis-pricing were al deliberate actions, those at the top have made a fortune out of the rest of us.

In a roundabout way, the U.K. government is responsible for financial fraud against the U.K. people.

All governments, they support this crap and make laws to protect their handlers higher up the ladder in the banking industry so there is no roundabout to it ;-) You should check your economic action plan in the UK, I would almost bet it is the same as in Canada. In the 2103 Canada Economic Action Plan, constructed by the now dead Flaherty (couldn't have happened to a bigger piece of crap but now Harper has his scapegoat?), the next bail program for Canadian banks will be a "Bail-In" rather than a bail-out, meaning they will skim percentages off of the deposit accounts providing "instant" criminal gratification, rather than do the funneling of the taxpayers money through government. However at the same time, they will invoke additional austerity measures.

ETA: Watch that Deloitte group, they appear to be a nasty criminal bunch. They have been on my government expose/book website consistently since 2006, sometimes from the risk management department, sometimes the executive office and sometimes the accounting people.

Cheers - Dave

a reply to: bobs_uruncle

While I will not dispute the likelihood of a coming major correction (perhaps understated) to markets, I would add that those who are in the know will be in the market in full force.

For every trade, there is someone else on the other end of the trade. So...if people are dumping stocks at losses then there is someone on the other end buying.

Most people are not aware of the market strategy of selling short, or shorting stocks. In a nutshell you can adopt 2 basic strategies (there are more, but not for this purpose). One is the one that everyone is familiar with: Going long. The traditional buy a stock, hold it in the hopes it goes up, and then selling that stock. The second is selling short: You sell the stock first, and then when the stock drops in price you perform a cover buy. You are making money as a stock drops.

This is no joke... I have done it often enough myself. There are rules, for instance you cannot sell a stock short on the down tic. In other words, if a stock is dropping like a sack of potatoes you are too late. So...you sell short on the up tic and then hold it until it drops and then you perform your cover buy. The cover buy balances the books, so to speak.

Sorry but this story seems kinda wrong.
The libor is as the article says, 'London Interbank Offered Rate' that major banks charge each other for loans.
The graphics shown is the interestrate which the fed or any other central bank sets to either stimulate or slow down the economy.
While it certainly is unusual for the interest rates to be so low for such a long period, a lot of money was lost during the crisis, hence the economic growth is slow or even negative.
So i do not see a rate hike anytime soon because it will certainly mean a schrinking economy as borrowing cost are more expensive.

I would say it is deregulation that is the cause of these bubbles, remember the ninja loanes and other scams from banks.
They are simply to big and able to influence the market for their own gain.
And they can do that without any risk because it is the taxpayer who will pay for the losses if and when it goes wrong.
There must be a line between private business and the state, no bailout and the banks should be 'to small to bail', cut them into pieces and let them fail if they mess up.
I am sure that this will mean that bankers are going to be a lot more carefull knowing that they won't be bailed out if they take to much risk.
There should be tight regulation, banks do not create growth, the entrepreneur who starts projects and creates jobs does, but therefore he needs money to invest and when borrowing cost are lower it is more attractive to do that.

originally posted by: earthling42
Sorry but this story seems kinda wrong.
The libor is as the article says, 'London Interbank Offered Rate' that major banks charge each other for loans.
The graphics shown is the interest rate which the fed or any other central bank sets to either stimulate or slow down the economy.
While it certainly is unusual for the interest rates to be so low for such a long period, a lot of money was lost during the crisis, hence the economic growth is slow or even negative.
So i do not see a rate hike anytime soon because it will certainly mean a shrinking economy as borrowing cost are more expensive.

But what is logical or known to be common sense doesn't usually happen. Take almost anything that comes out of a politicians mouth or on paper and simply invert the meaning, that's what actually happens. Interest rate hikes at this stage would kill the economy and with the 327% upsurge in April to use Chinese currency for trades out of the US, we have a big problem brewing.

I would say it is deregulation that is the cause of these bubbles, remember the ninja loanes and other scams from banks.
They are simply to big and able to influence the market for their own gain.
And they can do that without any risk because it is the taxpayer who will pay for the losses if and when it goes wrong.
There must be a line between private business and the state, no bailout and the banks should be 'to small to bail', cut them into pieces and let them fail if they mess up.
I am sure that this will mean that bankers are going to be a lot more carefull knowing that they won't be bailed out if they take to much risk.
There should be tight regulation, banks do not create growth, the entrepreneur who starts projects and creates jobs does, but therefore he needs money to invest and when borrowing cost are lower it is more attractive to do that.

I would disagree with the bankers being careful in this next round of coming failures, they never have been careful in the past, they always had a safety net of taxpayers and/or depositors to rape and pillage through legalized extortion via their government puppets. Since this feature of "bail-ins" is in the 2013 Canada Economic Action Plan, to allow the banks to use depositor (savings/current account) monies to bail themselves out by bailing us in, I expect this same kind of legislation has been placed in most other colonies as well as countries. The entire game is rigged.

It happened in Europe recently, it will happen here as well. The question becomes, "When will we have our French Revolution moment?" I don't see it being far off. I'm not a violent person anymore and I don't ride bikes, even if I still remember very well how to ride a "bike" if I have to.

Our situation is like a hellish childbirth, there's going to be pain, but let's "git 'er done" and move on to something better, we are wasting time treading water in "their" polluted pool.

Cheers - Dave