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This decline of rural lending is causing a huge macroeconomic distortion, like a balance-of-payments issue. A dollar is a dollar, but it is quite apparent that
by FiatLuxDave 9y ago
This decline of rural lending is causing a huge macroeconomic distortion, like a balance-of-payments issue. A dollar is a dollar, but it is quite apparent that the value of a dollar is different between rural Mississippi and urban Manhattan. There has to be a way of gaining from that difference. I feel like we are staring at the largest arbitrage opportunity in history and doing nothing.
But when I try to find good ideas to arbitrage it, I'm stuck. Of course, you can work remotely in San Jose and live in Wyoming, but this doesn't scale. I suppose opening a rural-oriented bank, to fill the gap, would do the job. Maybe it would be better to make a Bank-in-a-box kit (Sarbanes-Oxley-compliant, of course) and sell shovels to the gold miners? Does anyone have any ideas, good bad or crazy, that they are willing to share or discuss?
- woolvalley 9y agoIt's probably no arbitrage if it doesn't get 'fixed' for many years. TBH it's going in the opposite direction, from 2nd or 3rd tier cities into the 1st tier cities.
- passthefist 9y agoIt's totally different but I think Dollar General is benefiting from a similar play. They've really doubled down on rural areas, mostly playing off of the fact that people don't want to drive long distances to stores for basics and how much cheaper they are than the competition. Dollar General acknowledges the above, but I wonder if any of their success is related to that distortion?
- zeusk 9y ago> Of course, you can work remotely in San Jose and live in Wyoming, but this doesn't scale. Well, that does scale. Which is why you have TCS, Infosys, Accenture et al.