Outright buying physical assets at distressed prices seemed to work for Hugo Stinnes as well.
From Deutsche-Welle, September 17:
Prices are rising in Germany. And as they do, more Germans are turning to their local pawnbroker to make ends meet. One small-town pawnbroker predicts that business is only going to get better.
If you want to know the state of the German economy, just count the number of customers in Nikolaus Bode's shop.
The formula for working this out is fairly simple: If the pawnbroker in the small western city of Siegburg isn't very busy, the whole country is doing well. But if people are breaking down his doors, that indicates some kind of crisis.
This September, Bode has been so busy he can hardly think. And that means Germany is in a mess. "A pawnbroker is an indicator," Bode told DW. "People come here when there is a lot of unemployment or severe economic problems."
Bode previously managed real estate foreclosures. But in 1994, he set up his own business with his father, a pawnshop in the center of the city of around 40,000, in the state of North Rhine-Westphalia. He has been taking the country's economic pulse for almost three decades now.
As the owner of this kind of business, the recent uptick should be making him happy. But, in fact, he is seriously concerned.
"I'm getting a lot of much older people coming in and now also members of the the middle class, which hasn't really happened before," he said. "I have a lot of new clients. Along with my regular customers I am getting people whose incomes really fluctuate. Also people on welfare who might be waiting until their benefit comes through."
Short-term loans onlyBode's pawnshop in Siegburg is one of about 250 privately owned pawnbrokers in Germany. It's one of the oldest trades in the country — the first pawnshop opened in the city of Hamburg in 1560.
For those who don't know, pawnbrokers work like this: A customer loans the pawnbroker their valuable item, such as a piece of jewelry or a camera. The pawnbroker values the item and loans the customer a percentage of that value in exchange. Usually, the customer has three months to pay back the money, plus interest and a fee. If they don't pay the loan back, the item is sold by the pawnbroker, who keeps the money from the sale.
A typical exchange at Bode's shop would see somebody leaving a piece of jewelry there and, as an example, getting €400 (around $400) in return. Within three months, the customer would bring back €448, or lose the jewelry.
Most often though, people pay the money back. "Here the redemption rate is 96%," Bode explained. "Almost everybody collects the item they deposited because it's usually worth more than the cash we give them for it."....
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