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The Central Fact of the LIBOR Rate Scandal

by Gary North, Tea Party Economist

I begin with two charts.

First, the 1-month LIBOR rate.

Second, the 1-year LIBOR rate.

What do we see? First, they loosely parallel each other. Second, the move up began in late 2004.

What happened in 2004? The bubble in housing, all over the West. What caused this? Years of subsidized rates by central banks.

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