Latvians Mortgage Their Souls For Cash

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Anybody tired of hearing about personal, local and national budget crises? Would you like to step outside your personal sphere and just for a moment play the “relativity” card? That is where you are relative to others less fortunate. Are you feeling international?
 
Well, here’s the latest finance news out Eastern Europe, the Baltic republic of Latvia to be exact: their economy is cluster-bombed too.
 
Like the U.S., Latvia’s government is attempting to prop up its banks with savior capital and putting up cash for consumers who may be in heavy hock to local banks. Latvia’s version of economic stimulus plan could cost up to $80 million annually according to the Latvian parliament. That amounts to perhaps one year of compensation for Richard Fuld, of the erstwhile and now failed bulge bracket investment bank Lehman Brothers but that’s just for context.
 
Much like the U.S., property values in Latvia are plummeting and unemployment levels are hitting double digits as delinquent loan balances rise.
 
But here’s where Latvia takes a sharp left: People there are selling their souls for cash.
 
Not figuratively as some Americans do with payday and subprime or auto tile loans or crime or retail therapy as a spiritual and emotional analgesic -- but literally some Latvians are selling their souls.

This isn’t a misprint, a typo or a joke. As of this week more than 200 people have have signed away their immortal spirits for as little as $100 and as much as $1,000, according to Viktors Mirosichenko, proprietor of, shall we say, boutique Latvian finance house Kontona.

Whether the result of atheism or sheer desperation, people are putting up their intangible, unseen essence to get a little cushion coin. This despite the fact interest rates on the 90-day loans are as elevated as 1% a day.

Here’s what’s in the fine print of Kontona's (clearing throat) consumer finance package.

I, the undersigned do hereby take the loan from the Creditor under the known-to-me terms and conditions on the security of my immaterial intelligence, i.e. immortal soul. I also do hereby certify that the said bail is the property of the undersigned and is not promised to anyone,'

I repeat, this is not a hoax but is something straight out of the Faustian Bargain, a deal with darkness and avarice, fear and loathing, a deal for that which puts one above animals.

It was the French philosopher Alexis De Tocqueville, who in the 19th century posited that human beings make a “Faustian bargain” when “buying into the promise of material wealth and well being ahead of principle.”

This whole Latvian episode is whimsical albeit disturbingly so. It raises a greater question on the role that debt plays in our lives. Granted the Latvians that did take these loans out are thinking about the here and now and can buy back their spirits in 90 days at interest and it’s not like Kontona’s collection agency is going to call and say, “I going to need to margin call on that soul, I’m sending the repo man to come pick that up.”

That said, it makes me wonder what my threshold would be, what our threshold would be, what we would do in a desperate situation such as the ones these Latvians found themselves in. This is definitely a quandary that one cannot handicap unless starving, cannot say we wouldn’t do until it’s us.

Yet most in modern society will die with some kind of debt and events like these make one think about what’s important and why being responsible with money and refocusing attention on buying experience and time instead of things is of the utmost relevance.

It’s cut and dry. Your money or your life? Can you bring your wants and desires into parity with your well being, your self worth and esteem, your identity? Or will credit and debt have your nose needing skin grafts from putting it to the grindstone day after day to pay off an engagement ring. Or a flat screen or shoes or a car that loses value as soon as you put your blinkers on to turn out of the dealership. Or that house, whose floors echo with emptiness, tangible and otherwise, as you lift boxes and other things to depart because you can no longer afford it?

Chances are you won’t be putting your soul up as collateral for anything, anytime soon and this is the hope but on a larger level, have you compromised self to play catch up on a bill, to buy something you knew you shouldn’t? Have you indebted yourself to pay off an existing debt? Do you have a live-for-today-tomorrow-is-not-promised mentality and does that inform reckless monetary decision making?

Here’s what a man who works for Kontona and calls himself “Vesti Segodnya” said of the doomsday loans: “Business is business. We give people palpable cash. If a man values his soul, he’ll definitely pay back the credit. I guess, it’s all fair. Everyone can decide for himself, what’s more important.”
Indeed.