Payday Loans the Next Ponzi Subprime Debt Bubble to Implode?

to be honest Nadeem, I don't think you got this one 100% right,

What is base rate anyways, its not the true natural market rate, but a bunch of poeple that have assumed all knowledge and set some rate that only serves their interests.

You also say that the government must come save this situation, but wasn't it goverment that bailed out the last set of losers, so why call on them to save this.

I once had to use their service and borrowed around £400 and paid about £15-£20 in interest for the week (this was a long time ago so guessing what I paid). I had no choice as I was short on rent and yes I knew that I was getting scammed, but they provided a service that I needed. As a FREE individual I made this choice.

From my understanding this is how it works, more a week long type loan. If the loan is held any longer then the amount owed will soon be impossible to be repaid. Not being funny, but some of the poeple that are in this situation don't care, so if its impossible to pay it then they will simply write it off unless they mindful of the fact that they won't get a loan again, with no assets to their name nothing much the lender can do about it.

Yes on paper the debts will add up because of the high interest, but take the inflation adjusted principle + REAL market interest rate away and the rest will all be BS on paper like the derivative instruments created by Goldman Sachs.

The real problem is when these providers go broke and expect tax payer bailouts (THEFT - Socialism for Rich), there is no better regulation on this earth then failure itself.

Also these so called poor defenceless poeple that need PROTECTING are not that useless, in my everyday life I talk to poeple that are VERY AWARE of these pay day providers yet we talk sometimes as if these poeple are walking zombies. Socialism for the rich is a far greater threat.

Hi

I'm not saying the government should bail anyone out, quite the opposite.

The government should regulate this industry that is largely unregulated, else tax payers will be forced to foot the bill again.

The point I am trying to make as per the title is that the payday loans industry is a ponzi scheme, and all ponzi schemes eventually collapse.

Interest rates of over 2000% per annum have no justification, they are purely loan sharking enterprises.

Although I do agree that Socialism for the rich IS THEFT. Socialism in ALL its forms creates both zombie industries reliant on tax payer support and housing states full of zombies on benefits for life. This is NOT capitaism! This is a reciepe for perpetual econcomic depression towards an hyperinflationary collapse.

There is no free lunch be it for the benefits culture, ponzi payday loans or the whole banking sector. There is a price to pay for printing debt or money and that price is inflation.

You cannot just have over 8 million working age people sat idle and imagine there is no econcomic consquences. You cannot imagine stuffing the banks with £450 billion has no inflationary consquences.

Best

NW

To be honest, we all know how difficult it is to make money nowadays that is why people do whatever it takes to feed their families. Our government has made everything the way that it is almost impossible to lead an honest life with a proper job (check out the rating of unemployment+ graduates that can’t find jobs and suffer at paying off their student loans debt). It is understandable. I doubt all those collectors simply enjoy making life of other miserable. They just make money. To be honest, I don’t know which is really the best here: being hungry with a low-paid job or being having job that brings you good income. Think….

Alicia from http://paydayloansat.com/ lending company

Hi

Debt has ALWAYS been one of the primary mechanisms for turning people into slaves.

The elite want everyone and everyhing to become debt slaves, to own nothing and work their whole lives for the debt noose that is around their necks, just look at the Euro-zone, instead of going bankrupt these countries are being forced to service debt they cannot afford.

In my opinion payday loans is debt slavery on crack.

Best

NW

No the debt slaves aren't the poor, but the taxpayer through force of government to bailout the rotten apples.

Nadeem, you didn't answer my question, why when these payday operators and their backers face the impending failure of a clearly unsustainable model are they bailed out by us taxpayers. Money taken by force of goverment out of our pockets and given to these losers. Yet you focus on a free poeple capable of making their own choices both good & bad as the problem.

The sub-prime, the focus is on the poor who couldn't afford the mortages and the cry is regulation to stop poor poeple getting loans. If the banks were allowed to fail, then this practice would have stopped dead in the tracks without any regulations.

Hi

The truth is that they were not bailed out by tax payers. The money was printed, what the tax payers pay for are those that can work but choose not to work, as Romney said rather too honsetly, the 47%.

Like I said earlier, paydayloans is like debt on crack, yes free people have a choice of whether to take crack cocaine or not, but just like paydayloans it will sooner rather than later destroy lives, families and whole communities.

What we have with the banking bailout is socialism not capitalism and socialism in all its forms is destructive, unsustainable.

Socialism will be the death of western civilisation.

The only reason the West has got to where it stands today is due to competition, fierce competition, without which there is only stagnation and decline.

So it is good, that China, is on the march, conquering the world econcomy, building air-craft carriers, because if all there were was the fat lazy west then we would all be doomed. We need competition, to feed the fire of innovation and progress, to kick the lazy west out of its socialist complacency.

Best.

NW

Ok so bailouts is socialism as you stated, so isn't the solution to stop the bailout socialism as opposed to regulations slapped on the poor borrowing at some fixed artificial rate (anchored to base rate) created by a very small group of men. You cannot get blood from a stone and the pockets of the poor are not deep and these payday operators will fail all on their own.

When I mention taxpayers I merely over-simplyfy the category of victims of goverment ie theft by printing (my user name)... we all lose.

We agree with the problems, but we differ in the solutions. Regulations should always be used cautiously, as clever and as well thought out your soltion is, you cannot forsee the unintended consequances. Regulations is oppressive, stopping somebody making a bad decision by force is not freedom at all.

Hi

Yes, generally, the less regulation the better, but debt IS the problem. It is pure and simple slavery, for which payday loans is an extreme example of.

Freedom and debt don't go together for Debt IS SLAVERY, and the system is designed to control (enslave) people via debt.

Fight the Power! Be Debt Free!

Best

NW