So, a few days into the “LIBOR Scandal” what do we know, when did things start to go wrong and in what way did they breach “best practice”? Here’s a timeline to the current travails of the Treasury-privileged classes:

1690: John Freame, Quaker of Cirencester, and co-religionist Thomas Gould fled persecution in backward English countryside to traditionally more tolerant City of London to set up as goldsmiths, lending out paper tickets with nominal values worth many times that of the other peoples’ gold they held so they could earn interest in the hope all the ticket holders would not ask for the underlying gold at once.

Sealing our fate: the Bank of England Charter to indebt our country forever

1694: Relatively new king could not get parliament to give him more tax money or loans to fight foreign war, so strange Scotsman called Patterson and a bloke who had obtained high office at court by paying the substantial sum of £1,500 in bribes (£2.72 million in 2010 money as measured by earnings equivalent), suggested that if they were given a monopoly over financing the government’s borrowing needs and a posh name like “The Governor and Company of the Bank of England” they could persuade rich people they could profit without risk from those wars and the government would only need to pay 8% interest on the loans. Some of the rich lenders are later revealed as closely connected with the government. The resulting industry around rebuilding the navy was an early Keynesian style stimulus in return for handing over effective control of the Exchequer in one of the first PFI schemes.

1797-1821: Politicians, again killing the lower classes in war, told Bank to stop paying out money so it could print only paper money inflating the money supply and creating a debt that its citizens would be repaying for nearly two hundred years. Money is worth 58% of value in 1694

1844: By Act of Parliament this private bank was given a complete monopoly of the production of notes phased in over the next seventy years as other banks who had previously also issued their own notes were merged or began to do more business in London. Money is worth 68% of value in 1694.

1931: Politicians take charge of all the gold from the Bank of England, previously used to back the notes it issued. Money worth 46% of value in 1694.

1946: Politicians took over the bank completely and it began in earnest controlling money by manipulating interest rates to create “cheap money”, continuously devaluing the now effectively paper only money at the whim of politicians and the Treasury. Money worth 28% of value in 1694 (60% of value in 1931).

1997: As anticipated, politicians, such as Mr No-credit Lament made horrible mistakes, so new Labour government, who had taken over the bank originally, gave it the notional independence to manipulate its own interest rates so that government policy on continual devaluation could be maintained but politicians could not be blamed like Mr, now promoted to Lord, Lament. Money worth 1.2% of value in 1694 (2.6% of value in 1931)

2001: New committee, with indirect collusion of politicians and bureaucrats, embarked on long term downward manipulation of interest rates in order that politicians would not be embarrassed by going into a recession so soon after being elected for first time in many years. Bread-head bank man Eddie later told confused and distracted politicians on Treasury oversight committee they knew this was unsustainable and would cause imbalances in the economy if not sorted out by his successors. It never was. This led to:

2008: Credit market collapse. Politicians agree for Bank of England to print huge amounts of money to give to friends in the commercial banks whom they regulate and who now act to implement government and Bank of England set monetary policy by lending fake purchasing power to poor people.

2010: Money is worth 0.8% of what it was when Bank of England was founded in 1694 or 1.8% of its value just 81 years ago in 1931.

Nobody has ever been prosecuted for the decline of 98.2% in the value of money in your pocket since 1931.

2012: It is revealed that the successors of the goldsmiths Freame and Gould, now trading, under the same “sign of the spread eagle”, as “Barclays” had themselves massaged information they gave during the setting of a key interest rate. It appears that during the credit collapse, politicians and central bank personnel may have encouraged British bankers to say they could borrow at lower rates so as not to look too shaky and prompt a need for them to print even more money to give to them. Suddenly a few journalists and political hacks think something is wrong with the banking system and alleged political interference in it. Unlike the previous 300 years when it was probably okay.

*Relative money values provided by Inflation based calculator at

** Image of an early example of committee colluding to manipulate interest rates in 1694

The timeline to trouble
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