“The conspiracy to fix Libor appears more extensive than had been previously thought,” harrumphs the Financial Times in respect of the $1.2 billion fine of UBS over the London Interbank Offered Rate. “This was not just a question of massaging submissions to make UBS’s financial position look stronger than it was after the crisis. The settlement points to a coordinated effort across banks to manipulate market rates for profit . . .”

So when can we expect a raid on the Federal Reserve? We don’t want to — and do not – suggest here that the Federal Reserve is breaking the law. Or telling lies. We do mean to suggest that the Libor scandal is a reminder of the aphorism that the scandal is not in what’s illegal but in what’s legal. The Federal Reserve makes it its whole business manipulating interest rates, setting them according to the divinations of various Ph.D.s.

Not only does the Federal Reserve manipulate market rates but it does it for profits that are vastly greater than those of UBS. It reported that last year it made $77.2 billion in “profits.” Chairman Bernanke boasts about it nearly every time he goes up onto the Hill, along with the reminder that the profits are returned to the treasury of the United States. But what is the logic of the United States government entering into the kind of government-private partnership for the purpose of returning profits to the government.

What is the difference between that and a tax — or a confiscation? Particularly when the value of the few dollars that the rest of the country is left with plunges, just on Mr. Bernanke’s watch, to barely more than a third of the 568th of an ounce of gold at which it was valued on the day Mr. Bernanke acceded. What needs to be said of the Libor scandal is that if the goal is to set interest rates honestly and transparently across a global platform, the right way to do it is to define the dollar as a fixed number of grains of gold or silver.

This is the way the Founders understood it. This is the constitutional system in America, though the century following America’s founding taught that the better specie in which to define the dollar is gold. It is a virtue of gold that it is transparent, automatic, timeless, proven, and applicable across national boundaries. It puts rich countries, poor countries, large and small countries, all on an equal footing. A true resolution of the Libor scandal will await a proper monetary reform.