Irony: Rigged Markets


Now this made me chuckle….

A panel of European Union lawmakers will ask regulators from three continents today why authorities failed to crack down on a culture of rigging interest rates.

Michel Barnier, the EU’s financial services chief, will testify to a European Parliament panel along with Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, and Masamichi Kono, board chairman of the International Organization of Securities Commissions, in Brussels today.

Oh really?

How come Bernanke and the ECB aren’t in the dock over there?

It’s rather amusing to hear people talk about banks rigging rates (such as LIBOR) while The Fed and ECB engage in interest-rate rigging on a literal daily basis for the last oh….. since their formation?

Free market rates?  Where?  What is QE?  What is intentional suppression of interest rates via flooding the market with liquidity to “prevent depressions and recessions”?  What does this chart tell you?

The latter is not possible with a central bank that actually follows its mandate — to regulate currency and credit so as to produce stable prices.


Yet even that mandate, were it to be followed, is a scam.  Productivity improvement (the inevitable march of technology) should result in a mild deflation over time.  That is, your purchasing power in constant units should improve, because it requires fewer units of labor to produce the same objective results today than it did 20, 50 or 100 years ago.  The premise of “inflation” is simply that of enabling the theft of that labor from you by disguise.

So today was we have the strum and furor over LIBOR, with many wagging fingers and stern faces, let us not forget that the biggest manipulators of all, including those who intentionally act in direct violation of the law yet none of the governments that passed those enabling laws will send the violators to prison, are not even in the room.

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