By Greg Hunter’s USAWatchdog.com
Journalist Ellen Brown thinks one of the biggest banker frauds on the planet is the rate rigging of the London Interbank Offered Rate, or LIBOR. Hundreds of trillions of dollars’ worth of interest rates are set off of LIBOR globally. Many claim in court they were cheated, and that includes the FDIC. Brown says, “The FDIC suit is different from the others. Most of the previous suits were about anti-trust and RICO, which is racketeering and are federal claims. . . . It involves 16 of the world’s largest banks that Professor Bill Black called the largest cartel, and illegal cartel, in history . . . clearly a criminal conspiracy.” Brown, who is also an attorney, goes on to say, “The interesting thing about the FDIC case is this: They’re bringing ordinary common law claims for fraud, breach of contract and conspiracy to commit fraud. The University of California should bring that type of charge. They were one of many victims just like Harvard. That’s why all these tuitions have gone up, or a major reason why. They have to have these huge costs from their interest rate swaps that went against them. I would argue that they went against them not only because of manipulation of LIBOR but also because the Federal Reserve is the head of the private banking system and pushed rates very low.”
Brown says, “I would love to see a California jury get a hold of this. Juries can give 30 times damages; they don’t just give three times like in a RICO claims. You could get very high damages from an outraged jury. The reason why the University California hasn’t brought a suit is because the man who is their chief financial officer actually worked for Lehman Brothers in 2007. He was instrumental in setting up these interest rate swaps, and he’s been doing swaps ever since. He went through the revolving door, and he’s not particularly inclined to sue his own people, but I think a claim should be brought and I’d like to see what a jury did with it.” The big bankers are not prosecuted with crime. They are just fined. The fines are not helping society, and Brown contends, “These fines are the cost of doing business, but they don’t really help us. That’s why I find the possibility of bringing civil actions so interesting for actual damages. If we get all the state and local governments that are involved in interest rate swaps, all the hospitals, pension funds and universities all across the country, if they all sued for fraud . . . we could actually have some serious judgments that would go into the pockets of the people. They could go into the state and local governments, and that could reduce their taxes, lower tuition, etcetera. . . . Another thing they can get out of these deals is . . . for fraud and breach of contract, you can get out of the deal. If you didn’t get what you bargained for, that’s grounds for terminating the contract. . . . This was a major factor in bringing down Detroit. Chicago, L.A. and New York all have these burdensome interest rate swaps. They are all over.”
On bank bail-ins coming to the EU, Brown says, “This banking union that they have been working on for a long time where all the Eurozone countries would effectively bail out their bankrupt banks, it’s 130 banks that could be bailed out under this fund. But before they tap the fund, they are supposed to go after the creditors. The creditors would be the stockholders, the bond holders, but the largest class of any bank is the depositors. It says the insured depositors, under a 100,000 euros, are exempted, but the problem is . . . deposit insurance was supposed to be covered by the EU and they didn’t agree on that. So, what you are stuck with is the deposit insurance of your local bank. . . . It’s like the FDIC fund covers less than 1.5% of the deposits. You can just imagine a meltdown in Europe which seems likely because the banks in Europe are so incredibly shaky. If a number of those banks go down, they are not going to have the money in the insurance fund to cover the deposits.” Can bank bail-ins come to America? Brown, who has written two books on the advantages of public banking, says, “It could, and I think it will. They don’t have any alternative if they are going to keep these banks alive. This is the solution: They just knock down the liabilities, and they will be solvent again, but what that means is they’ll be taking the depositors’ money. . . . They are making it legal. This is what will be done in the event they are not solvent. They are too big to fail. They can’t allow these banks to fail, so what will they do? They will take the deposits and case solved.”
Join Greg Hunter as he goes One-on-One with Ellen Brown, whose blog is called Web-of-Debt which can be found on EllenBrown.com.
(There is much more in the video interview.)
After the interview:
Ellen Brown’s latest article on her Web-of-Debt blog is called “Wall Street Greed, Not Too Big for a California Jury.” It’s about the continuing LIBOR fraud and what can be done to combat it. It’s posted today, and can be found on EllenBrown.com.