Ponzi Bonds - They really are laughing at us!

[Nagel]

This opens up a big question. If people accept debts of the central bank as payment, then why can’t the people bypass the central bank and write promissory notes of their own?

 

I already do this via Zopa. It's a social lending site where you can lend money to other people. I get a better rate of interest than I could in any savings account and borrowers get a better rate than they could by borrowing anywhere else. Everyone wins and it bypasses the banking system.

[Chris_Sleeps]

Everyone wins and it bypasses the banking system.

Not all banks are bad. I've got my savings with Triodos.

[Nagel]

Not all banks are bad. I've got my savings with Triodos.

 

They might be more ethical than other banks, but they only pay 2.50% interest. I get 6.5% with Zopa.

[Phanerothyme]

Zopa sounds like an elegant solution to keeping cash - a medium of exchange - in circulation whilst still acting as a store of wealth.

 

Who sets the interest rate at Zopa, or how is it calculated? I gather it's regulated through the somewhat less laissez-faire Dutch banking laws.

[Nagel]

The interest rate is in the name. ZOPA stands for zone of possible agreement, so it's set at the crossover at which people are willing to lend and borrow and is a measure of supply and demand.

 

There's a range of interest rates which go up and down according to supply and demand and also vary for different risk groups. You get a higher rate for lending to higher risk groups, but then you also expect a higher rate of bad debt. I haven't looked into that fully, but I suspect you get the same returns whichever group you lend to.

 

Here's today's rates -

 

http://uk.zopa.com/ZopaWeb/public/lending/great-returns.html