What’s the science behind this LIBOR scandal and what are the global implications?
I keep hearing murmurs about how this shit might could body powerhouses like Barclays but the media ain’t really touching the topic (not that i’m surprised)
Science behind it: Banking system is a farce. The Libor Spread was fixed so that the banks could boost their balance sheets and perpetuate low interest rates. The Fed does the exact same thing so the private bank that runs our country is just as complicit.
Implications: The implications for the bankers are nothing. If anyone gets arrested it’s more to show a sense of accountability but I bet no one gets 20 years… For you and I the implications are big. The interest rates on bonds is less than the rate of inflation so we lose (if you’re a saver). Also IF the Libor rate goes up, those with ARM mortgages will feel pain when it adjusts.
Stay away from long term bonds.. Hold cash and commodities.. And when I say “hold cash”, I don’t mean in the bank.