When the economy tanks, the government is one of the very few entities that can still borrow cheaply and in quantity. Unfortunately many governments are off fl

When the economy tanks, the government is one of the very few entities that can still borrow cheaply and in quantity. Unfortunately many governments are off flogging austerity to the public while underwriting the banks and keeping interest rates near zero. So the banks can't be bothered lending and the lender of last resort becomes the payday loans companies. Meanwhile traditional banking is busy investing in the payday loans rather than directly lending itself as bank loans follow interest rates. The USA is actually doing comparatively well in all this as it never took the austerity thing to heart as much as the Eurozone, where Germany is currently worrying about a triple-dip. edit - as far as I can tell, the reason that the interest rates have been kept so low, at least for here in the UK, is because the house price bubble must be defended at all costs. There is a large portion of the UK economy that will scream blue-murder if they stop getting massive year on year returns on simple ownership of housing and the Bank of England doesn't like pissing them off, which is going to be Mike Carney's job when he finally raises interest rates, shortly before jumping ship as the official scapegoat of the UK house price crash. Obviously this is a massive guess, but it looks somewhat likely.