Are you familiar with LIBOR?
For those who are, and are experts, you can get your hands really dirty with it in the comments below. For those who aren’t, how about an introduction in a couple hundred words.
If you’re still scratching your head about the 2008 financial crisis that left people pointing fingers and blaming everyone and everything from presidents to policy to local politicians and a very expensive war, it seems that there was a little more to the foundation of the problem that began with 16 of the world’s most prestigious and powerful financial institutions that began many moons ago.
LIBOR stands for London Interbank Offered Rate. All the interest rates in the world are based on credit, which is based on factual figures, future forecasts and a load of variables. Ultimately, these interest rates are determined by LIBOR. This system relies on legitimacy and honesty within the various financial institutions, and the proper reporting of their figures. That’s a kindergarten version of how it works. Here’s a video to offer a little more understanding.
The entire modern world is affected by the rates set by LIBOR. Mortgages, investments, credit card interest, auto loans–you name it. This organization consists of institutions such as Bank of America, CitiGroup, JP Morgan, Chase, Deutsche Bank, Barclay’s, The Royal Bank of Canada, Credit Suisse, Bank of Tokyo-Mitsubishi…the list goes on.
LIBOR is now under investigation–a monster investigation including several of its working entities–for fraudulently manipulating rates based on profit desire, as opposed to fact.
If you’re still under the impression that governments are in charge of how things work in this world, think again…there are a few absurdly powerful, richer than nations individuals, who push the buttons and dial the switches.