It amazes me how Canadians and Americans love the royal family, yet the whole point of North America was you had access to land and could escape the crushing serf-like structure found in the UK.
100% agreed, reading this is like being 8 and walking down a path with your hero holding your hand explaining about whatever is mystifying you. It's that pleasant.
I don't think it does apply to p2p loans. When I save $100 with a bank I retain my demand deposit - that $100 is still "there" for me. That is the multiplier effect (though that model has other flaws).
When I borrow $100 from p2p lending then loan it out to you through p2p lending I no longer have that $100 until you repay it to me, at which point you no longer have it. So we are simply passing $100 around without any multiplier effect.
edit - can't reply to you as the reply limit bottomed out - your response doesn't have enough info. You didn't address the demand deposit vs timed loan difference.
surely p2peer is just that. If I have $100 and you want to borrow $100 I lend to you. I get a rate of return on this and the p2peer company take a cut on that rate for being the middle-man. They don't act as guarantor, if you fail to repay the $100 I loose out (and they loose their cut of the interest).
When you "lend on" money you yourself borrowed in peer2peer lending at this point you cede access to that money. Unlike when you save with a bank where your money is lent out (except the 10% reserve) yet you have a demand deposit for the full amount. Hence the multiplier effect.
I think your description above is totally wrong. Banks in the UK had leverage at over 20 times assets to capital. It was precisely this high level of gearing which meant that our banks collapsed very quickly when there was a shift in the economy.
Banks lend most of the money out back out based on the probability that most loans won't default. Your 1+2 isn't correct.
Market lenders aren't banks. They cannot use fractional reserve banking. If they take in $100 they loan out $100. A bank takes in $100 having loaned out $10K to satisfy reserve requirements 10% (likely less but keeping it simple).
So if most lending moved to market lenders we would see a collapse in the money supply.
Is this simply because regular TV has advertising and advertisers want to target the people with the most money?
There is a huge gap in wealth between generations thanks to debt via housing and education. Are advertisers putting pressure on program makers to make shows that appeal to old people? I'd guess they've done a lot of thinking on this.
