AuthorTopic: Podcast- Nicole Foss (Stoneleigh) of The Automatic Earth on Currency Issues: Part 1  (Read 9167 times)

Offline RE

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Off the microphones of Nicole Foss, RE & Monsta


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Aired on the Doomstead Diner on August 28, 2013


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Discuss at the Podcast Table inside the Diner



How will the monetary system implode on itself? Will Inflation, Hyper-Inflation or Deflation rule the day as the system seizes up? What will occur with Asset Values and Derivatives? Who has the strongest claims to underlying wealth remaining in the system? Can Gold & Silver substitute for a failing Fiat Monetary System? How will the Just In Time Shipping paradigm react to dislocations in the Credit Markets? Will Financial Contagion overtake the Supply Chains?


These and other questions are discussed in the latest Diner Podcast with Nicole Foss, Stoneleigh of The Automatic Earth. Nicole is a former Editor of The Oil Drum Canada, and was a Research Fellow at the Oxford Institute for Energy Studies, where she specialized in nuclear safety in Eastern Europe and the Former Soviet Union, and conducted research into electricity policy at the EU level.


The second part of the Podcast with Nicole will focus on Energy Issues, and will be available for listening on the Diner next week. In this podcast, Nuclear Energy will be discussed as well as Renewable Energy issues.


In addition, in the next few weeks, the Diner will begin Vidcasts featuring multiple Bloggers, Researchers and Authors discussing and debating the various topics of Collapse Dynamics. The first of these Vidcasts will be focused on the upcoming Occupy Monsanto demonstrations scheduled for September 17, 2013. However, if the War in Syria escalates over the next couple of weeks, this may provide additional discussion material.


I discuss the Upcoming Diner Vidcasts in the next Episode of I Spy Doom. You get a nice little tour of the Last Great Frontier of Alaska from the Passenger Seat of my Ford Explorer SUV in this one also. LOL.



RE


Save As Many As You Can

Offline Eddie

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When I first came to the doom blogosphere, I was firmly in the inflationary camp, and tended to give a lot of credence to hyperinflationistas like Gonzalo Lira. It was Nicole's persistent logic, along with that of Mike Shedlock, that persuaded me that the current economic situation is radically different than that of the 1970's. Until I began to appreciate the huge credit bubble and the effects of increasing energy costs, I viewed that the present mess was analogous to that particular time and situation.

I also read everything I could about hyperinflation, and was persuaded by Martin Armstrong that hyperinflation of the world's reserve currency was unlikely.

I still hold the view that the banks, and the government, love inflation and will do everything in their power to CAUSE inflation. However, on balance, it seems to me that the deflationary pressures are going to win out, and that we will have a massive depression at some point. Two years? Not so sure about that.

« Last Edit: September 06, 2013, 10:56:03 AM by Eddie »
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Offline Eddie

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One other thing that I wonder about is whether credit will actually dry up completely, since we have legal usury now.

What I see happening before the whole system breaks down is the development of a sort of loan shark economy, where credit is available...for an exorbitant price.

I see it now, of course. It just hasn't spread to the upper echelons of our society. Poor people have been paying pawn shop interest rates for a long time now. But the credit cards I have are at 8 to 10 percent APR. And if I want a loan for anything of a consumer nature that isn't a car, the fine print generally says I'll pay at least 10 percent...but more likely closer to 20. That's if I want to buy a refrigerator, or a television (Not to worry, I've bought my last one of those. It hasn't been turned on in years.)

The toys that used to appeal to me were vintage boats and cars. I'd never finance one of those now  either, but I could...it's just that the interest is above 9%. That's for someone who has a 750 credit score and makes a six figure income.

I noticed that JPM is getting out of the student loan market. I'll say that when JPM says they're getting out of the credit card market....that's when a depression is imminent.
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Offline monsta666

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What I see happening before the whole system breaks down is the development of a sort of loan shark economy, where credit is available...for an exorbitant price.

You are already seeing this develop in England. Payday loan companies are making a killing and have lent to around 2 million people in the last year and the largest loan shark: Wonga increased profits by 36% in the last financial year. It is to be expected because the decline of real wages in England is one of the worst in Europe. It is comparable to places like Portugal, Greece etc. as it is fourth from bottom out of the 27 EU nations. As the cost of living goes up it can only get worse. As for the rates I am not sure what it is like in the States but it is not unheard of to hear APRs of over 4000% and the highest charging dealer recently raised its base rate close to 6000%.
« Last Edit: September 06, 2013, 05:51:14 PM by monsta666 »

Offline Surly1

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What I see happening before the whole system breaks down is the development of a sort of loan shark economy, where credit is available...for an exorbitant price.

You are already seeing this develop in England. Payday loan companies are making a killing and have lent to around 2 million people in the last year and the largest company Wonga increased profits by 36% over the last year. It is to be expected because the decline of real wages in England is one of the worst in Europe. It is comparable to places like Spain, Greece etc. as it is fifth from bottom. As the cost of living goes up it can only get worse. As for the rates I am not sure what it is like in the States but it is not unheard of to hear APRs of over 4000% and the highest charging dealer recently raised its base rate close to 6000%.

4000% quickly becomes Orkin Man territory. You and eddie have the wage squeeze exactly right. This will not end well.
"It is difficult to write a paradiso when all the superficial indications are that you ought to write an apocalypse." -Ezra Pound

Offline g

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What I see happening before the whole system breaks down is the development of a sort of loan shark economy, where credit is available...for an exorbitant price.

You are already seeing this develop in England. Payday loan companies are making a killing and have lent to around 2 million people in the last year and the largest company Wonga increased profits by 36% over the last year. It is to be expected because the decline of real wages in England is one of the worst in Europe. It is comparable to places like Spain, Greece etc. as it is fifth from bottom. As the cost of living goes up it can only get worse. As for the rates I am not sure what it is like in the States but it is not unheard of to hear APRs of over 4000% and the highest charging dealer recently raised its base rate close to 6000%.

4000% quickly becomes Orkin Man territory. You and eddie have the wage squeeze exactly right. This will not end well.

Hi Surly, Payday loans have no doubt gotten way out of hand and are clear cut usury and taking advantage of people who are hurting.

The interest rates quoted here are obviously fiction and absurd. No one is lending someone 100 dollars and getting 60,000 dollars back in twelve months or whatever the time frame.  The worst abusers are getting 500 percent and those are rare and very shady operators.

Offline monsta666

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The interest rates quoted here are obviously fiction and absurd. No one is lending someone 100 dollars and getting 60,000 dollars back in twelve months or whatever the time frame.  The worst abusers are getting 500 percent and those are rare and very shady operators.

I did not post those links for no reason. One of the lessons I did learn when editing in Wikipedia way back when is that you should post links when making any large claim. A claim that a company charges 4000% APR is a pretty big one in my books. Here are some extracts from the article that comes from The Guardian newspaper:

Quote from: The Guardian
The payday lending industry has boomed in recent years as cash-strapped [UK] households have sought alternative ways to borrow following the withdrawal of mainstream banks from lending and the removal of government assistance such as the crisis fund. Although short-term loans can sometimes be cheaper than those from conventional lenders, annual interest rates are often in excess of 5,000% APR and costs can quickly spiral if a debt is extended or a payment missed.

A year-long review by the Office of Fair Trading found that half of lenders' revenues was the result of rolled over loans. On Tuesday, the UK's largest lender, Wonga, reported a 36% increase in profits to 62m on a turnover of 309m in 2012. The Bureau of Investigative Journalism, which analysed the lending, said this had contributed to total turnover among the top 10 firms of almost 800m, against just over 300m three years previously.

Quote from: The Guardian
One firm, Lending Stream, which offers loans of up to 1,500 for up to six months at an interest rate of 4,071.5% APR, has increased its turnover by 42 times in three years, while Wage Day Advance, which quotes an APR of 7,069.3%, has increased its profits 32-fold to 20m since 2008.

Quote from: The Guardian
In July, the archbishop of Canterbury made waves by declaring that the Church of England would seek to "compete [Wonga] out of existence". The 2bn a year payday lending industry is currently under investigation by the Competition Commission after the Office of Fair Trading discovered evidence of irresponsible lending practices. Wonga recently raised its standard interest rate to 5,853% APR meaning if you took out a loan for 10, you would owe 585 in interest a year later.

Offline g

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The interest rates quoted here are obviously fiction and absurd. No one is lending someone 100 dollars and getting 60,000 dollars back in twelve months or whatever the time frame.  The worst abusers are getting 500 percent and those are rare and very shady operators.

I did not post those links for no reason. One of the lessons I did learn when editing in Wikipedia way back when is that you should post links when making any large claim. A claim that a company charges 4000% APR is a pretty big one in my books. Here are some extracts from the article that comes from The Guardian newspaper:

Quote from: The Guardian
The payday lending industry has boomed in recent years as cash-strapped [UK] households have sought alternative ways to borrow following the withdrawal of mainstream banks from lending and the removal of government assistance such as the crisis fund. Although short-term loans can sometimes be cheaper than those from conventional lenders, annual interest rates are often in excess of 5,000% APR and costs can quickly spiral if a debt is extended or a payment missed.

A year-long review by the Office of Fair Trading found that half of lenders' revenues was the result of rolled over loans. On Tuesday, the UK's largest lender, Wonga, reported a 36% increase in profits to 62m on a turnover of 309m in 2012. The Bureau of Investigative Journalism, which analysed the lending, said this had contributed to total turnover among the top 10 firms of almost 800m, against just over 300m three years previously.

Quote from: The Guardian
One firm, Lending Stream, which offers loans of up to 1,500 for up to six months at an interest rate of 4,071.5% APR, has increased its turnover by 42 times in three years, while Wage Day Advance, which quotes an APR of 7,069.3%, has increased its profits 32-fold to 20m since 2008.

Quote from: The Guardian
In July, the archbishop of Canterbury made waves by declaring that the Church of England would seek to "compete [Wonga] out of existence". The 2bn a year payday lending industry is currently under investigation by the Competition Commission after the Office of Fair Trading discovered evidence of irresponsible lending practices. Wonga recently raised its standard interest rate to 5,853% APR meaning if you took out a loan for 10, you would owe 585 in interest a year later.

Your source is either a tabloid rag or the author can't add.  :icon_study:




Lenders target naive military with usurious payday loans
One Purple Heart recipient paid 400 percent interest
Gallery: Lenders target naive military with usurious payday loans
Travel Deals






Paul Kiel, ProPublica, and Mitchell Hartman, Marketplace, PROPUBLICA/MARKETPLACE SPECIAL REPORT
Last updated: Wednesday, May 15, 2013, 11:28 AM

This story was co-produced with Marketplace. Listen to their coverage.

Seven years after Congress banned payday-loan companies from charging exorbitant interest rates to service members, many of the nation's military bases are surrounded by storefront lenders who charge high annual percentage rates, sometimes exceeding 400 percent.

The Military Lending Act sought to protect service members and their families from predatory loans. But in practice, the law has defined the types of covered loans so narrowly that it's been all too easy for lenders to circumvent it.

"We have to revisit this," said Sen. Dick Durbin, D-Ill., who chairs the defense appropriations subcommittee and is the Senate's second-ranking Democrat. "If we're serious about protecting military families from exploitation, this law has to be a lot tighter."

Members of the military can lose their security clearances for falling into debt. As a result, experts say, service members often avoid taking financial problems to their superior officers and instead resort to high-cost loans they don't fully understand.

The Department of Defense, which defines which loans the Military Lending Act covers, has begun a process to review the law, said Marcus Beauregard, chief of the Pentagon's state liaison office.

The act mainly targets two products: payday loans, usually two-week loans with annual percentage rates often above 400 percent, and auto-title loans, typically one-month loans with rates above 100 percent and secured by the borrower's vehicle. The law caps all covered loans at a 36 percent annual rate.

That limit "did do a great deal of good on the products that it covered," Holly Petraeus, the Consumer Financial Protection Bureau's head of service member affairs, said in an interview. "But there are a lot of products that it doesn't cover."

Representatives from payday and other high-cost lenders said they follow the law. Some defended the proliferation of new products as helpful to consumers.
A 400 Percent Loan

In June 2011, when Levon Tyler, a 37-year-old staff sergeant in the Marines, walked into Smart Choice Title Loans in Columbia, S.C., it was the first time he'd ever gone to such a place, he said. But his bills were mounting. He needed cash right away.

Smart Choice agreed to lend him $1,600. In return, Tyler handed over the title to his 1998 Ford SUV and a copy of his keys. Tyler recalled the saleswoman telling him he'd probably be able to pay off the loan in a year. He said he did not scrutinize the contract he signed that day.

If he had, Tyler would have seen that in exchange for that $1,600, he'd agreed to pay a total of $17,228 over two and a half years. The loan's annual percentage rate, which includes interest and fees, was 400 percent.

Tyler said he provided his military ID when he got the loan. But even with an annual rate as high as a typical payday loan, the Military Lending Act didn't apply. The law limits the interest rate of title loans but only those that have a term of six months or less.

In South Carolina, almost no loans fit that definition, said Sue Berkowitz, director of the nonprofit South Carolina Appleseed Legal Justice Center. The reason? Ten years ago, the state legislature passed consumer protections for short-term auto-title loans. In response, lenders simply lengthened the duration of their loans.

Today, plenty of payday and auto-title lenders cluster near Fort Jackson, an army base in Columbia, legally peddling high-cost loans to the more than 36,000 soldiers who receive basic training there each year.

Tyler's loan showcases other examples of lenders' ingenuity. Attached to his contract wasan addendum that offered a "Summer Fun Program Payoff." While the loan's official term was 32 months, putting it outside both South Carolina's regulations and the Military Lending Act, the "Summer Fun" option allowed Tyler to pay off the loan in a single month. If he did so, he'd pay an annual rate of 110 percent, the addendum said.

Michael Agostinelli, the chief executive of Smart Choice's parent company, American Life Enterprises, told ProPublica he wants his customers to pay off their loans early. "They're meant to be short-term loans," he said. He also said that customers who pay on time get "a big discount." In Tyler's case, he would have paid an annual rate of 192 percent if he had made all his payments on time.

But Tyler fell behind after only a couple of payments. Less than five months after he took out the loan, a repo company came in the middle of the night to take his car. Three weeks later, it was sold at auction.

"This was something new, and I will never do it again," Tyler said. "I don't care what type of spot I get in."

American Life Enterprises companies operate nine title-lending branches in Nevada and South Carolina. Agostinelli said loans to members of the military are rare for his companies but that service members might go to a title lender for the same reason anybody else does: They need money immediately and discreetly.

Loans similar to the one Tyler took out are broadly and legally available from stores and over the Internet. QC Holdings, Advance America, Cash America and Ace Cash Express all among the country's largest payday lenders offer loans that fall outside the definitions of the Military Lending Act, which defined a payday loan as lasting three months or less.

The annual rates can be sky high, such as those offered by Ace Cash Express in Texas, where a five-month loan for $400 comes with an annual rate of 585 percent, according to the company's website.

Ace Cash is among a number of payday lenders just outside the gates of Lackland Air Force Base in San Antonio, and it has four stores within three miles of Fort Hood in Texas.

A 2012 report on the Military Lending Act by the Consumer Federation of America found there had been no drop in the number of payday lenders around Fort Hood since the 2006 law went into effect.

Amy Cantu of the Community Financial Services Association of America, which represents the payday industry, said payday lenders are careful to screen out service members for their short-term products. But she acknowledged that payday companies may provide soldiers and their families with other types of loans. "We welcome more products in the market," she said of the trend of payday lenders increasingly offering longer-term loans. "Options are good for consumers."
Earned a Purple Heart, Lost a Car

Some lenders apparently haven't bothered to change their loan products in response to the law.

A 2011 federal class-action suit filed in Georgia's Middle District alleges that one of the largest auto-title lenders in the country, Community Loans of America, has been flouting the law. The suit names among its plaintiffs three soldiers who took out what appeared to be classic title loans. All agreed to pay an annual rate of around 150 percent for a 30-day loan. All had trouble repaying, according to the suit. One, an Army staff sergeant and Purple Heart recipient, lost his car. The other two managed to pay interest but almost none of the principal on their loans for several months.

The company was fully aware that its customers were soldiers, because they presented their military identifications, said Roy Barnes, a former governor of Georgia who is representing the plaintiffs.

Community Loans, which boasts more than 900 locations nationwide, argued in court that the transactions were not covered by the Military Lending Act because they weren't loans but sales. Here's how Community Loans said the transaction worked: The soldiers sold their vehicles to the company while retaining the option to buy back the cars for a higher price. In early 2012, the judge rejected that argument. The case is ongoing.

Community Loans, which did not respond to numerous calls and emails, has been making loans to service members through businesses with various names.

Leading up to the gates of Fort Benning in Columbus, Ga., Victory Drive is crowded with lenders. Among them is Georgia Auto Pawn, a Community Loans of America storefront where one of the plaintiffs in the class action, an Army master sergeant, took out his loan.

Just another half-mile down the road is a lender advertising "Signature Loans for the Military." The lender goes by the name of Title Credit Finance, but the parent company is Community Finance and Loans, which shares the same corporate address as Community Loans of America.

A billboard for Title Credit Finance promises to rescue borrowers: Showing a picture of a hamster on a wheel, it says, "Avoid the title pawn treadmill," referring to customers who get caught paying only interest month after month.

Title Credit Finance offers installment loans, a product which, as the company advertises, does seem to provide "CASH NOW The Smart Way" at least when compared to a title loan. Interest rates tend to be lower though still typically well above 36 percent. And instead of simply paying interest month upon month, the borrower pays down the loan's principal over time.

But the product comes with traps of its own. Installment lenders often load the loans with insurance products that can double the cost, and the companies thrive by persuading borrowers to use the product like a credit card. Customers can refinance the loan after only a few payments and borrow a little more. But those extra dollars typically come at a far higher cost than the annual rate listed on the contract.

At TitleMax, a title-lender with more than 700 stores in 12 states, soldiers who inquire about a title loan are directed to InstaLoan, TitleMax's sister company, which provides installment loans, said Suzanne Donovan of the nonprofit Step Up Savannah. A $2,475 installment loan made to a soldier at Fort Stewart near Savannah, Ga., in 2011 and reviewed by ProPublica, for example, carried a 43 percent annual rate over 14 months but that rate effectively soared to 80 percent when the insurance products were included. To get the loan, the soldier surrendered the title to his car. TMX Finance, the parent company of both TitleMax and InstaLoan, did not respond to multiple calls and emails seeking comment.

Another lender on Victory Drive is the publicly traded World Finance, one of the country's largest installment lenders, with a market capitalization of about $1 billion and more than 1,000 stores around the country. World was the subject of an investigation by ProPublica and Marketplace earlier this week. Of World's loans, about 5 percent, approximately 40,000 loans, are made to service members or their families, according to the company. Active-duty military personnel and their dependents comprise less than 1 percent of the U.S. population, according to the Defense Department.

Bill Himpler, the executive vice president of the American Financial Services Association, which represents installment lenders, said the industry's products had been rightfully excluded from the Military Lending Act. The Pentagon had done a good job preserving soldiers' access to affordable credit, he said, and only "tweaking the regulations here or there to tighten them up" was necessary.
The Commander and the Collectors

It's not known how many service members have high-priced loans. The Pentagon says it intends to conduct a survey on the matter soon and issue a report by the end of the year.

But some commanders, such as Capt. Brandon Archuleta, say that dealing with soldiers' financial problems is simply part of being an officer. Archuleta, who has commanded soldiers in Iraq and Afghanistan, recalled fielding numerous calls from lenders trying to track down soldiers who were delinquent on debts.

"In the last 12 years we've seen military officers as war fighters, we've seen them as diplomats, we've seen them as scholars," Archuleta said. "But what we don't see is the officer as social worker, financial adviser and personal caregiver."

While some soldiers seek help from their superior officers, many don't. That's because debt troubles can result in soldiers losing their security clearance.

"Instead of trying to negotiate this with their command structure, the service member will typically end up refinancing," said Michael Hayden, director of government relations for the Military Officers Association of America and a retired Air Force colonel. "It'll typically start out with some type of small crisis. And then the real crisis is just how you get that loan paid off."

Soldiers who hide their debt often forego the military's special aid options. Army Emergency Relief and the Navy-Marine Corps Relief Society offer zero-interest loans. But in seeking that help, a soldier risks alerting the commanding officer to his or her troubles, particularly if the sum needed is a large one.

Russell Putnam, a legal-assistance attorney at Fort Stewart, says he often finds himself making a simple argument to soldiers: "A zero percent loan sure as heck beats a 36 percent plus or a 25 percent plus loan."

www.philly.com/philly/business/Lenders_charge_400_percent_interest_to_members_of_the_armed_service_army_airforce_marines_navy.html

Offline monsta666

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Your source is either a tabloid rag or the author can't add.  :icon_study:

Firstly, The Guardian is not a tabloid rag but a well respected newspaper in the UK comparable to papers such as The Times or Independent. Many professionals read it and it is well respected. The less well respected ones are The Daily Mail, The Mirror and worst of all The Sun. Those final three are the tabloid rags. As for you example in the link you provided it would seem the US does set a limit on the rate of interest. No such law exists in the UK and it would seem the lenders can set interest rates to whatever they; their rates started at extortion but have increased to bloody murder.

Also if you looked, the rate 5853% APR on a 10 generates an interest of 575.36 over the year and if you include the principal that needs to be repaid it does indeed add up to 585 as quoted in the article. I suppose there was a mistake as it stated 585 for the interest bearing component when it should have said the 585 pays back the interest and the principle. It is an error but only a minor one and I think it is enough to prove it's point. I think nitpicking on this fine bit of arithmetic is just an excuse to ignore real problem which is the usurious rates of interest being charged.  You are hand waving GO and trying to deny the exploitation that goes on.

Offline g

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Your source is either a tabloid rag or the author can't add.  :icon_study:

Firstly, The Guardian is not a tabloid rag but a well respected newspaper in the UK comparable to papers such as The Times or Independent. Many professionals read it and it is well respected. The less well respected ones are The Daily Mail, The Mirror and worst of all The Sun. Those final three are the tabloid rags. As for you example in the link you provided it would seem the US does set a limit on the rate of interest. No such law exists in the UK and it would seem the lenders can set interest rates to whatever they; their rates started at extortion but have increased to bloody murder.

Also if you looked, the rate 5853% APR on a 10 generates an interest of 575.36 over the year and if you include the principal that needs to be repaid it does indeed add up to 585 as quoted in the article. I suppose there was a mistake as it stated 585 for the interest bearing component when it should have said the 585 pays back the interest and the principle. It is an error but only a minor one and I think it is enough to prove it's point. I think nitpicking on this fine bit of arithmetic is just an excuse to ignore real problem which is the usurious rates of interest being charged.  You are hand waving GO and trying to deny the exploitation that goes on.

I am not hand waving Monsta. I clearly stated in my response that it was usury and taking advantage of those hurting if you go back and read it.

The only reason I mentioned it was the madness of it. Not from the borrowers point of view, those poor bastards are desperate and will sign anything, but from the lenders point of view. How could a money lender with half a brain expect to lend some poor bastard 10 bucks and get 600 back and be sane at the same time.  Apparently I was wrong, another time my attempt at CFS didn't work.

It is my belief that my postings and Gold Silver threads have made it clear I have a disdain for credit fiat money and banksters usury.

Offline monsta666

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Your source is either a tabloid rag or the author can't add.  :icon_study:

Firstly, The Guardian is not a tabloid rag but a well respected newspaper in the UK comparable to papers such as The Times or Independent. Many professionals read it and it is well respected. The less well respected ones are The Daily Mail, The Mirror and worst of all The Sun. Those final three are the tabloid rags. As for you example in the link you provided it would seem the US does set a limit on the rate of interest. No such law exists in the UK and it would seem the lenders can set interest rates to whatever they; their rates started at extortion but have increased to bloody murder.

Also if you looked, the rate 5853% APR on a 10 generates an interest of 575.36 over the year and if you include the principal that needs to be repaid it does indeed add up to 585 as quoted in the article. I suppose there was a mistake as it stated 585 for the interest bearing component when it should have said the 585 pays back the interest and the principle. It is an error but only a minor one and I think it is enough to prove it's point. I think nitpicking on this fine bit of arithmetic is just an excuse to ignore real problem which is the usurious rates of interest being charged.  You are hand waving GO and trying to deny the exploitation that goes on.

I am not hand waving Monsta. I clearly stated in my response that it was usury and taking advantage of those hurting if you go back and read it.

The only reason I mentioned it was the madness of it. Not from the borrowers point of view, those poor bastards are desperate and will sign anything, but from the lenders point of view. How could a money lender with half a brain expect to lend some poor bastard 10 bucks and get 600 back and be sane at the same time.  Apparently I was wrong, another time my attempt at CFS didn't work.

It is my belief that my postings and Gold Silver threads have made it clear I have a disdain for credit fiat money and banksters usury.

Well apologies for the misunderstanding. This type of thing will get worse because as stated earlier; the cost of living keeps increasing yet peoples' wages remain the same so it is likely the temptation to get these loans will increase as unexpected expenses come up. Well we will see what happens in hyperinflation it will be the creditors who lose out but if it is deflation that wins, I am afraid there will be a lot of borrowers who end up destitute.

Offline g

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Well we will see what happens in hyperinflation it will be the creditors who lose out but if it is deflation that wins, I am afraid there will be a lot of borrowers who end up destitute.

The answer to the inflation deflation puzzle would be one heck of a valuable thing to know Monsta.

I side with the inflation camp currently, but we both know this make believe paper castle cannot withstand a real ill wind.

Offline jdwheeler42

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Well we will see what happens in hyperinflation it will be the creditors who lose out but if it is deflation that wins, I am afraid there will be a lot of borrowers who end up destitute.
The answer to the inflation deflation puzzle would be one heck of a valuable thing to know Monsta.

I side with the inflation camp currently, but we both know this make believe paper castle cannot withstand a real ill wind.
I think it boils down to one simple question, who is more powerful, the uber-rich or the government?  The government will push it into inflation, the uber-rich into deflation.  While the question is simple, it is difficult because so far push has never come to shove, they've always been on the same team, or at least have been able to find a mutually acceptable solution, ie screwing the masses.  It'll be interesting to see what happens when that doesn't work anymore and they have no one to steal from but each other.
Making pigs fly is easy... that is, of course, after you have built the catapult....

 

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