Falling Gold Prices: the Effect on Pawn Shops

[dualstow]

One highlight is that when gold was high, people who used to repeatedly pawn their jewelry and get it back by paying all the interest were now more likely to default. This is because when the price of gold rose, people realized they could borrow more and their eyes got big. They weren't thinking about the interest on this new bigger loan.

Now default rates are leveling off.

http://www.npr.org/blogs/money/2013/07/ ... pawn-shops

[dragoncar]

So pawning your gold was kinda like renting a call option?