Imagine a monthly game called:

guess the price of blueberries. Anyone can play. And there is big prizes if you get it right. The price of blueberries varies month by month from £1.50 to £2.50 a punnet. So it is a little like betting on horses - you would need to know the form, what the weather was like, where the blueberries were coming from, that kind of stuff. Could be quite fun.

But then imagine what would happen if a group of big players were able to place orders for up 20 per cent of all the blueberries on the 29th of the month? That could cause a jump in the price of blueberries. The people who bought the blueberries would know this in advance and would be able to win the game.

That is pretty much how the forex exchange scandal worked, only with money, instead of blueberries. They were guessing on the price of pounds and dollars - which are set daily at 4pm sharp in what is called "the fix". But big players, RBS, HSBC, etc - the too big to fail club - were putting in rush orders so they could influence the price. They had to do it in the 60-second window when the price was fixed for the day.

Thanks to computerised banking and the access these people have to our money - remember we own RBS - they were able to play the markets and make a heap of money for themselves in a game they created and rigged. And they were not very subtle about it. They did their fixing on private chat rooms using dumb names like the 3 Musketeers, the Bandits, the Mafia, etc. Anyone who looked at the movements of the prices could see they were being rigged.

The Bank Of England official who was sacked yesterday had it confirmed to him in 2008. But nothing was done. The reason nothing was done was because of something called "light touch regulation" in the City Of London. This was Chancellor Gordon Brown's policy of letting the banks do anything they wanted.

You see the New Labour believers in "post neo-classical endogenous growth theory", as the Chancellor's then sidekick Ed Balls called it, thought complex markets like foreign exchange were too big to manipulate.

And, yes, this is very, very big. Traders were dealing in a foreign exchange market worth £3.5 trillion a day. A day. That's more than twice the annual GDP of the United Kingdom. No one could influence that surely?

All these millions of transactions - everything from you changing your money to go on holiday to businesses exporting to countries with a different currency. Surely that is all too big for anyone to manipulate, they thought. This just goes to show how stupid politicians can be. They had allowed banks like RBS, which had a balance sheet of £2trn before it crashed, to get bigger and bigger because they thought this meant they were "world beaters", "golden geese" "Einsteins of finance".

The banks were paying a lot in taxes to fund Labour's public sector expansion so the Chancellor persuaded himself they must be a good thing. Financiers also lent Labour lots of free interns and donations in kind that showed they were nice people.

But we now know. They were conducting grand theft banking, the biggest scam in history. We handed the economy of the industrialised world into a kleptocracy that used the wealth of nations for personal enrichment.

It is not just foreign exchange dealings that were fixed. The same cartels were fixing Libor - the London inter bank borrowing interest rate on which trillions of transactions are based every day. The Libor fixers were the same types who manipulated forex and sent each other the same high five messages when they fiddled interest rates that affected everything from pensions to mortgages rates.

The Bank Of England knew all about this too. Like most of the scams, they believed it is just what bankers do. It is not real money. It is not real stuff like blueberries. It is all just funny money, isn't it? Funny money like the sub-prime mortgages that banks sold to millions of home-buyers. Or worthless collateralised debt obligations Or the 125 per cent suicide mortgages Northern Rock was handing out. Or the payment protection racket.

By allowing banks to get huge and then turning a blind eye to what they were up to, we created just the kind of environment in which corruption could flourish. You see, banking is all about manipulation. Banks do not actually do anything productive. They create money out of a computer screen, then lend it to people at high interest rates. Sounds mad, but that is how it works.

They use the money that comes back in interest on this fictitious capital to pay themselves bonuses and lend the rest to businesses and homeowners. As they do this, the economy expands and more money is sloshing around in the system. Bankers also get to manage this money, much of which they have indirectly created, because businesses and people depend on banks for loans, security and services like foreign exchange. These are just seen as further fields for manipulation.

Of course, in time they lend out too much, create bubbles in things like property, blueberries, etc, and then every so often there is what is euphemistically called "a correction" when the whole pile of fantasy finance comes crashing down. But the too big to fail banks know they will not have to pay the price of their folly. We the taxpayers came in in 2008 with a rescue package of loans, swaps, and capital injections which the Bank of England calculated at more than £1trn.

And we are still paying day in day out. Quantitative easing and near zero interest rates are largely a money making exercise for the banks. They get free money from the Bank Of England, which they can lend to us at 5 per cent or even buy government securities that pay 1 per cent or 2 per cent a year interest. Where is the economic logic in that? We are paying a ransom as they hold the economy hostage with a gun to our heads

Do you feel lucky? they said to politicians, in 2008. Do you want us to close the ATMs? And so the politicians opened our wallets. Forget the fines for the foreign exchange scam. That's nothing. We have let these crooks plunder our economy with impunity for decades. And they are still doing it.

They buy up politicians with the lure of lucrative banking jobs after they retire from politics. They buy up the regulators, the civil servants in the Treasury, the officials in the Bank Of England in the same way. Money does not change hands of course. It is all done, like the foreign exchange cartels, on the QT. See you right, mate. Big Time. No worries.

If it had not been for the fact they were stupid enough to put it all down in texts and e-mails, no one would have known. The regulators - at least in the UK - never wanted this exposed.

The scams will continue as long as we allow banks that are too big to fail to control the economy. But the banksters will make sure they do not leave any e-mail trail. My advice? Invest in digital encryption services. There is going to be a boom.