The overnight LIBOR rate has been .25% for several months. Last night it closed at .07%. In 2008 it went negative. In other words liquidity dried up and banks stopped lending thus giving us a fiscal crash in the banking system. The banks would not lend money to anyone, because central banks money supply dried up. .07 is about one third of the last few months of trading. If it goes negative again, all hell will break loose again in Wall street...IMO. Check out the graphs and the rates at global-rates.com its real and its looming. Dry powder up kiddies as we wil be the winners when we pick up the broken pieces. Learn from history, don't repeat it. LG
The Euro Libor Rate is .020 as we go to bed, if you back track on these posts you will see how USA is approaching the fiscal cliff. A zero or negative rate means capital has completely froze uo, exactly what happened in 2008. 09/14/2012
.03714 is the current overnight rate on the Euro LIBOR. It has been cut in haf from my last post and is rapidly approaching zero. In other words banks will refuse to lend to one another.....and that's when capital markets freeze up.....money flow STOPS. The DOW is now down 214 points on more bad news from Europe. I suspect this is the week of correction or next week. Dry powder is highly recommended and then when Benny Q3's under protest.....we start looking at capital markets. Its funny how the talking heads are complaining about extremely light trading volumes. Retailers have stepped back from the constant steam rolling by corrupt banksters. Whose fault is all this mess banksters, regulators, politicans....drug cartels.....I don't know. Buy low....sell high.
LIBOR can't be fixed by one bank and all this Barclays stuff is garbage. I don't think it could be materially changed by a bank consortium either - see my other posts. NYSE repo (an alternative) will not change a thing other that to convince Joe Blow that as things have changed therefore things are OK now. QE3 and onto to QE infinity is a given as the fractional money world is a joke at this point. As Europe and Wall St collapse the dollar will remain strong or stronger. Everything will freeze up solid and there it will stay with catastrophic consequences. So gold static until we realize that we need to start another war to get things moving. Read your thirties history. Then gold will soar overnight and no time top trade that one.So buy gold - go fishing. I have posted that for years here.