E The Federal Reserve Knew LIBOR Was Exploding In 2007 And Did Nothing

Perhaps I exaggerated there. But it would be interesting to see growth going forward for the next 20 years. The way things are set up now, it seems as though major growth in the economy is going to be difficult. And it seems that as the crash was allowed to happen, with the full knowledge of the Fed, so is a slow economy being set up with the full knowledge of the Fed.

One more related issue regards the Sumner/CATO cabal and its desire for rapid economic growth. These economists spend a lot of time blogging about the need for easier loans and easier zoning, in order for growth to take place. But those loans hurt a lot of people. Germany grows without allowing toxic loans for its people. German home ownership is below 45 percent and rent controls are in place. Of course, as I wrote on Business Insider a long time ago, the German banks loaned money to the periphery with easy terms. Must be nice to be in the protected group.

Here is the chart showing that at the exact time when LIBOR crossed the Swaps rate, the financial crisis began the recession. By the way, you always have to keep in mind that the Fed had access to this Swaps and LIBOR data. One wonders why it didn't act to lower interest rates much sooner.

 

 

 

 

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Disclosure: I am not an investment counselor nor am I an attorney so my views are not to be considered investment advice.

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