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Author Topic: We need a bank!  (Read 1593 times)
Daily Anarchist
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April 08, 2012, 11:21:45 PM
 #21


I'm having a hard time wrapping my head around those interest rates. I understand that the market(supply and demand) set interest rates. I'm just having a hard time understanding WHO would pay the interest rates he must charge in order for him to pay those huge rates back to his depositors.


http://lmgtfy.com/?q=payday+loan



Neat! Thanks!

You're welcome. I was simply trying to point out that an industry exists
out there in meatspace and that when it comes to crazy interest rates,
the bankers on these forums are rank amateurs. The wikipedia page,
in particular, is enlightening.



I just finished reading the Wikipedia page. Are you saying that what seems like exorbitant interest rates charged by the loan sharks here are actually a pittance of what the legal payday lenders charge?

And I don't mean that in a bad way!

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April 08, 2012, 11:22:12 PM
 #22


I'm having a hard time wrapping my head around those interest rates. I understand that the market(supply and demand) set interest rates. I'm just having a hard time understanding WHO would pay the interest rates he must charge in order for him to pay those huge rates back to his depositors.


http://lmgtfy.com/?q=payday+loan



Neat! Thanks!

You're welcome. I was simply trying to point out that an industry exists
out there in meatspace and that when it comes to crazy interest rates,
the bankers on these forums are rank amateurs. The wikipedia page,
in particular, is enlightening.



I just finished reading the Wikipedia page. Are you saying that what seems like exorbitant interest rates charged by the loan sharks here are actually a pittance of what the legal payday lenders charge?

IMHO this is correct. I've heard of some even charging daily compounded interest.

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April 08, 2012, 11:57:24 PM
 #23

I just finished reading the Wikipedia page. Are you saying that what seems like exorbitant interest rates charged by the loan sharks here are actually a pittance of what the legal payday lenders charge?

Exactly. Also, they prey on a class of the population who is more
often than not incapable of simple math and therefore incapable of
realizing the giant financial quagmire they are stepping into when
taking payday loans.

(they basically fall prey to this : http://en.wikipedia.org/wiki/Wheat_and_chessboard_problem

As to what is happening on these forums, my experience has been
that most borrowers are either:

    - miners trying to build their farm and therefore have some
      sort of repayment plan organized

    - people profiting from arbitrage opportunities with newcomers
      wanting to get their hands on coins quickly, even if that means
      paying a premium.

    - people who want to make a quick BTC purchase on bitmit and
      can't afford to wait for the Bank->Gox turnaround time.

In other words, I think lending on these forums - so far - hasn't
been particularly predatory but rather providing useful service.

I also suspect shadier uses of the money borrowed, but I have
no proof or way of knowing.

Bottom line: I believe, and certainly hope that the folks who borrow
here know what they're doing when they accept these type of rates.



You make good points.

There is however on other type of borrower since the interests rates being charged are less than what one can earn.

Imagine being able to take a cash advance off of your CC at say 15% but earn 30% with said cash advance.

Everyone is happy. Until... the CC companies get pushed out of business.

Corporations have been enthroned, An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. ~Abe Lincoln 1ApJdWUdSWYw8n8HEATYhHXA9EYoRTy7c4
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