Truthfully I think the loan system is broken. What incentive do clubs have to play loan players ahead of their own when push comes to shove? They won't get a transfer fee for them and all of their development will benefit another club.
Have to agree here. Somewhat funded on the gloablization of football, the growing of scouting networks and more and more clubs everywhere trying to produce their own players to forego paying inflated fees and instead eventually cash in on them has led to this development. Clubs would rather play their own players than invest time to develop someone else's. Only in very special cases loans are still en vogue - e.g. when a club is seriously in financial trouble or needs a cheap quick fix 'cause of injuries etc.
Think we will definitely see more permanent deals for youngsters in the near future.