Thai Love Affair With Credit Means Big Business For Debt Collectors

[thaigene2]

I am so old that I had grandmothers who preached to us: "Neither a lender, nor a borrower, be."

They saw even buying a house on a mortgage as "Saddling yourself with a huge debt".

Wise women.

And in my youth, governments controlled the 'never-never' rigorously. We had to save up about 40% for down-payment before we could get furniture etc.

They were right. We need protecting from ourselves.

It is going to be interesting in a few years, when all the "Westernised countries" debt ends up owned by the few oil-exporting countries of the Middle East and Russia etc.

The West shouldn't expect much mercy. There are a lot of old sores that are most unlikely to be forgotten.

This year, I shall watch the Thai government's actions on personal debt.

The coup appears to have been backed by the most conservative political elements.

It will be interesting to see if the concept of "be satisfied with sufficiency" is put into practice, or is just lip-service whilst the rich are still enabled to find it easy to exploit the poor.

Whilst I agree with your central premise of being careful with debt, I'd like to point out that back in the 'good-old-days' - especially in places like the UK - there was a high-handed approach by the elites to keep money and credit 'tight' - and away from the masses. This allowed the 'landed' gentry to maintain their status without competition from the masses. The masses simply had no access to investor capital - while the gentry used their title-deeds as collatoral for venture capital.

Rather than 'protecting' the rest of society, the priviledged elites were simply making sure no one else could enter the club. No access to capital means little or no chance of marketing a better mousetrap and putting M' Lord out of business.

Would you deny micro-credit to a poor farmer who, with some more money to buy extra chickens, could have more eggs to sell and more animals to breed yet more? If it's coupled with some basic veterinary training he may do just fine - and profit. His kids go to school and get a better education, etc. That's both self-sufficiency and access to credit.

However, I do agree with you that people need to be better educated - not just here - but everywhere about credit and the dangers of over-extending. And you're right on about the owners of America's foreign debt - boy could they get a kicking one day.

[FREDPAT]

I am so old that I had grandmothers who preached to us: "Neither a lender, nor a borrower, be."

They saw even buying a house on a mortgage as "Saddling yourself with a huge debt".

Wise women.

And in my youth, governments controlled the 'never-never' rigorously. We had to save up about 40% for down-payment before we could get furniture etc.

They were right. We need protecting from ourselves.

It is going to be interesting in a few years, when all the "Westernised countries" debt ends up owned by the few oil-exporting countries of the Middle East and Russia etc.

The West shouldn't expect much mercy. There are a lot of old sores that are most unlikely to be forgotten.

This year, I shall watch the Thai government's actions on personal debt.

The coup appears to have been backed by the most conservative political elements.

It will be interesting to see if the concept of "be satisfied with sufficiency" is put into practice, or is just lip-service whilst the rich are still enabled to find it easy to exploit the poor.

Whilst I agree with your central premise of being careful with debt, I'd like to point out that back in the 'good-old-days' - especially in places like the UK - there was a high-handed approach by the elites to keep money and credit 'tight' - and away from the masses. This allowed the 'landed' gentry to maintain their status without competition from the masses. The masses simply had no access to investor capital - while the gentry used their title-deeds as collatoral for venture capital.

Rather than 'protecting' the rest of society, the priviledged elites were simply making sure no one else could enter the club. No access to capital means little or no chance of marketing a better mousetrap and putting M' Lord out of business.

Would you deny micro-credit to a poor farmer who, with some more money to buy extra chickens, could have more eggs to sell and more animals to breed yet more? If it's coupled with some basic veterinary training he may do just fine - and profit. His kids go to school and get a better education, etc. That's both self-sufficiency and access to credit.

However, I do agree with you that people need to be better educated - not just here - but everywhere about credit and the dangers of over-extending. And you're right on about the owners of America's foreign debt - boy could they get a kicking one day.

Man, so true. If Japan decided to cash in all its US T-bills, we're talking serious cashflow issues. The Saudis own something like 4-5% of all US debt. That's ###### scary!!!!

[minimart]

When I bought my car last year from a dealer in Khon Kaen I asked my sister-in-law (who was director of finance at the company) how many vehicles were bought on finance "About 75-80%" she said. How many are repossessed I then asked " About 35% within the first 18 months"

She told me a tale of one family, who, when the company attempted to repo the vehicle, denied ever having bought it and accused the company of forging the ID card and signatures of the vehicle "owner"!!!!!!!

Thye got it back in the end. It was parked in the next soi in a neighbours garden.

[Pepe']

This has been indeed a very interesting thread.

I've been married to a Thai woman from Samut Sakorn for eight years now.

We've done some business in Thailand, land developement and construction.

I thought I understood fairly well what the mentality was.

The contributions of those posting here has shed even more light on the "senario"

Thanx...

[lotus eater]

By the way, 5%/month is ILLEGAL as it is usurious (spelling???). Mine, at 24%/pa, was just under the acceptable limit. Correct me if I'm wrong, but I don't think private money-lenders can charge more than credit card companies, which is about 26%/pa, if I'm not mistaken.

I don't doubt it's illegal but I'm assured it's never the less commonplace. In fact I'm told that loan sharks deal in loans at even higher rates all the time in the poorer areas of Bangkok, and elesewhere.

I don't know if it's corruption, apathy, intimidation or what - but the law apparently give little practical protection.

[chaiyapoon]

For those that haven't seen what goes on the Isaan countryside with loan sharks I'll add what I know.In the village I used to stay at,the top rate was 20% per month or 240% per year! 10% is the'norm' these are illegal rates but accepted by most.

Rates depend on how desperate the person needing the loan is plus what colateral is handed over.Very often these are private loans by little old ladies who have been doing this for years and are known to the police,who seem to turn a blind eye even when they repossess a farm or send their family round to lean on defaulters.

5% is what I was told is the maximum legal rate but still 60% a year!This level doesn't even frighten the borrowers at all.I've heard of people taking out government loans at cheap fates to lend money out to others at 10%.

[BlackJack]

we are lucky enough to have a money tree in our condo and so anytime money is needed I tell the GF to get some from the tree and go buy what she wants.

[moebius]

This is just the result of a modern way of the exploiters preying on the gullible.

A shrewd old British Prime Minister, Harold McMillan...

(clip)

The banksters there, aided by a villain called Alan Greenspan, have got lots of Americans to run up huge debts on the basis of unsustainable "values" of their houses, and they are on the verge of starting to suffer...

(clip)

The 'sophisticates' scoff at the idea that being satisfied to have the security of managing on what is sufficient and not striving for excess would be more sensible. But the 'sophisticates' are just conning gullible people into becoming their debt-slaves.

Ah, well. It is their karma that they are building up.

The means of 'living beyond one's means' didn't begin with foppy old Brits and semi-retired American bureaucrats. It could, however, be attributed to "sophisticates" - even before the word was coined from Greek sophistry - to ancient Babylonia; where the 'sophisticates' of the day began a long tradition of tapping out their credit to the point where war, attrition, exploitation of their own and other populaces appeared as the best way to resettle their debts.

So much for ruling systems; everything truly repeats itself in one form or another; so, be they aristocrats, feudalists, autocrats, or monarchies, the only thing democracy has truly wrought is the right to do it to yourself on your own behalf.

But don't worry. Democratically speaking, once enough of the populace is suckered into debt they'll simply march in the streets until someone overthrows the local collection office.

It's a beautiful world.

[Noel]

This is just the result of a modern way of the exploiters preying on the gullible.

A shrewd old British Prime Minister, Harold McMillan...

(clip)

The banksters there, aided by a villain called Alan Greenspan, have got lots of Americans to run up huge debts on the basis of unsustainable "values" of their houses, and they are on the verge of starting to suffer...

(clip)

The 'sophisticates' scoff at the idea that being satisfied to have the security of managing on what is sufficient and not striving for excess would be more sensible. But the 'sophisticates' are just conning gullible people into becoming their debt-slaves.

Ah, well. It is their karma that they are building up.

The means of 'living beyond one's means' didn't begin with foppy old Brits and semi-retired American bureaucrats. It could, however, be attributed to "sophisticates" - even before the word was coined from Greek sophistry - to ancient Babylonia; where the 'sophisticates' of the day began a long tradition of tapping out their credit to the point where war, attrition, exploitation of their own and other populaces appeared as the best way to resettle their debts.

So much for ruling systems; everything truly repeats itself in one form or another; so, be they aristocrats, feudalists, autocrats, or monarchies, the only thing democracy has truly wrought is the right to do it to yourself on your own behalf.

But don't worry. Democratically speaking, once enough of the populace is suckered into debt they'll simply march in the streets until someone overthrows the local collection office.

It's a beautiful world.

Good post!

Such a shame that so many take being referred to as being 'sophisticated' as a compliment...

[Butterfield8]

This is just the result of a modern way of the exploiters preying on the gullible.

A shrewd old British Prime Minister, Harold McMillan, used to call the exploiters' agents: "The banksters".

It goes like this: "Get people to want things they don't need, and tell them that it is alright to buy them with money they haven't got (which we will lend them). And then we will live comfortably on the interest that they have to pay us".

However, Thailand isn't too deeply in trouble.

It is America that is really in the deep, deep rotting manure. The banksters there, aided by a villain called Alan Greenspan, have got lots of Americans to run up huge debts on the basis of unsustainable "values" of their houses, and they are on the verge of starting to suffer.

Britain is deep in it, too. And lots of debt-loaded brits are simply taking themselves by repudiating their debts through personal bankruptcy or IVAs (Individual Voluntary Arrangements).

The 'sophisticates' scoff at the idea that being satisfied to have the security of managing on what is sufficient and not striving for excess would be more sensible. But the 'sophisticates' are just conning gullible people into becoming their debt-slaves.

Ah, well. It is their karma that they are building up.