deponti (deponti) wrote,

The slippery path into the vortex.... "Gold Loans"


Every morning, my newspaper (Deccan Herald) carries these huge lists (covering two or three pages) of gold items that have fallen forfeit, and are being auctioned. To me, these lists are stories of human beings sliding deeper into the quagmire of losing the little they had.

If at all the people who get "gold loans" against their gold (no one calls it pawning these days, but that is what it is) have some chance of redeeming their gold, the other kind of gold transaction that is heavily advertised in all the media, gives no opportunity whatsoever for getting the gold items back.

The "gold purchase" ads show shiny ladies in beautiful homes, all smiles as they explain how all one has to do is to go with the gold to them. The company will a) either purchase the gold at the current rate; or b) redeem the gold from the place where it has been "loaned", and give the person the difference between the rate s/he pawned it and the matter is done. "Take the money," says the lady with her bewitching, bejewelled and coiffed smile, "Settle your problems, and live happily, without worry." No mention is made of the desperate situation which would drive someone to pawn/sell their gold; how that money would quickly disappear into the maws of existing debt, making it impossible ever to redeem that gold, or buy any gold, again.

The gold finance/loan companies obviously are making huge sums of money on these transactions. There is, of course, no room for scruples, human empathy, or care about the unhappy people who will watch their gold being forfeit and sold at auction, or disappearing forever to assuage the urgent financial needs, which, like the Hydra-headed monster, will rear more and more heads each succeeding day.

Surely the companies which offer these band-aid "gold loans" and "gold purchases for instant cash" know that such loans can almost never be repaid, nor the gold ever bought back. Such transactions are the slippery, one-way path to poverty. What else should we do to keep people and families from slipping into this vortex?
Tags: commerce, deccan herald, newspapers, observation, sadness, thoughts

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