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How Crowdfunding Can Prevent the Next GFC

To make the claim that Crowdfunding can truly prevent GFC in the future, we must first understand what actually happened in the last GFC. The origin of what Australians call the Global Financial Crisis (GFC) lies in the US housing market.

The basics of every financial problem are when you peel it to the core and it's simple. People buy things, which they cannot afford, for a time the world "makes believe" survive. Then the music finally stopped making everything fall apart. If you want to know more about crowdfunding, then you can also visit www.equitydoor.com/.

Driven by low-interest rates and lenders loose financial regulations in the US began to encourage people to borrow and invest at home. And what can be safer than investing at home? After all, this is America's big dream of owning a home. House prices have historically generally never fallen.

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The population continues to increase, the land remains the same, housing prices will always rise, and that's a general theory. It seems indeed survived.

The money supply for loans for safe assets such as houses is unlimited and the government is involved. To promote the dream of homeownership, the US federal government basically supports home loan applications from people deemed unfit to buy and supports large home loans.

Once the full power and splendor of the country were behind this sudden application, the so-called "sub-prime" mortgages were rich results. They offer strong interest rates and are supported by secure assets and government guarantees.

Most rating agencies give them good ratings. Those who don't risk losing their clients as financiers threaten to refrain from using their services.