Payday loans gone wild

A sign of our times: everywhere we look today we see different payday loan shops. These shops cater to the droves of increasingly desperate people looking to cover cash flow shortfalls and agreeing to pay immoral, enslaving interest rates as a result. Unfortunately in the weakest economic recovery ever, the loan shark business is one of the truly booming sectors following the great recession of 2008. Since most countries have legal limits on the amount of interest one can charge (60% Federally in Canada), the most unscrupulous lenders have been moving off shore and offering loans on line with rates up to a mind-boggling 600% according to some reports.

In an excellent piece of investigative reporting, Bloomberg’s Zeke Faux dives into the predatory world of short term loans and finds unscrupulous promotional partners like Montel Williams and embarrassing investors like Harvard, Massachusetts Institute of Technology, the John D. and Catherine T. MacArthur Foundation and pension funds in California, Oregon and Maryland. See: Secret Network connects Harvard money to payday loans

The global economy continues to struggle under the weight of years of malinvestment encouraged by increasingly maniacal “easy money” policies out of central banks and their brethren. The trade-off has been brutal and self-defeating as it has made both institutions and households increasingly strapped for cash flow and reasonable investment alternatives in the wake of asset bubbles that reduce all yields towards nil.

The choices have been to exercise self-control in order to save more and spend less or throw all standards and reason to the wayside in order to whore after any dollar from anywhere regardless of risk, morality or longer-term health. But it matters how we make our money. Gouging pounds of flesh off the weakest, least advantaged members of our society is ultimately self-destructive and repugnant no matter how we try to justify it. Kudos to those who keep exposing the truth.

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