Thursday, July 16, 2009

Peer-to-Peer Loans Offer Investors 12% Return to Bypass Banks

Here's what happens when you sustain the financial sector in its present, largely unregulated form. Now it may be a good thing for consumers, however, down the road it sets up the same kind of potential meltdown--where many of these so-called, "peer-to-peer" loans go bad, ushering in a new period of failures and bankruptcies.

Read here.

If policymakers understood that the banking system is a construct of the government and can easily fulfill the role of providing credit to the private economy, in any quantity, under a regulated structure, we wouldn't have the need for such high-risk types of finance.

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