Canadian borrowers are fast approaching a day of reckoning.
Lured by cheap money to buy up, buy in, expand and make over, families have pushed credit levels to a record high.
Now, mortgage rates are beginning to creep up and the Bank of Canada is poised to retreat from the record-low interest rates it adopted to fight the recession and spur recovery.
The end of the free-money era has left consumers more vulnerable than ever, and those who threw caution to the wind could soon face costs they can't handle.
Household debt has surged three time faster than income in recent years and now stands at a record high of more than $1-trillion. Put another way, Canadians owe about $1.47 for every dollar of disposable income. Even more remarkably, they took on more debt during the slump – a first for a recession – because borrowing was so cheap.
With debt levels this high, even a small hike in interest rates will be ugly for those whose incomes aren't rising fast enough to meet their day-to-day expenses.
Their woes could have a snowball effect: As debt-strapped consumers pull back, their credit woes spill over into the broader economy and risk putting a damper on the recovery.
For some, the trouble has already begun. John Silver, who runs Community Financial Counselling Services in Winnipeg, has seen his caseload increase 20 per cent from last year. “We re seeing more people coming in with more stress with regard to their debt,” he said.
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everything is ok! we can just tax more and print more.
ReplyDeleteThe PTB have done an excellent job of bankrupting every country in the world, they should be proud of themselves.
ReplyDeleteWe are in big trouble here in the US, Canada, fill in the blank________________.
Better prepare yourself and family, it's going to get ugly very soon.
They can't have their short term goal fulfilled, the Bank of the World, without making it a global collapse and not just the USA.
ReplyDeleteIf they could kill the USA economically and have their world bank they would do it, but it isn't enough.
In the months ahead you will start to hear that term Bank of the World over and over again via the Oligarch controlled media. It will be praised up and down as the savior to all the world's economic and social problems.
ReplyDeleteIn reality, it is centralized, untouchable control for the banksters. An identity/account for everyone living on this planet. Complete financial dictatorship.
This will not happen in Amerika, comrades!LOL
ReplyDeleteActually, what most people fail to realize is that the USA has natural resources so plentiful it's almost hard to imagine. For instance, there are billions of barrels of oil out in North Dakota and Montana, the north slope of Alaska is full of it too, but they won't talk about it, because oil is control.
No, the fact is the USA is here to stay and it's the other countries that they are trying to FUBAR first.
All this talk about peak oil is a good laugh, that is about it
All this talk about oil dependence period is a good laugh. Free energy is reality, but we just cannot have it.
ReplyDeleteThis is bad news for our neighbors to the north,eh?
ReplyDeleteI think that Americans are finding any reason to try and make themselves feel better. There is no big crisis in Canada. Even Gerald Celente said that Canada will fare this world crisis better and named Canada as one of the few countries that will remain relatively unscathed. Dream on Americans and wake up and fix your own country instead of trying to make everyone else look bad.
ReplyDelete2:32, I am Canadian and I don't say "eh" so please just stuff it; tired of being the butt of jokes.
ReplyDelete"Canada will fare this world crisis better and named Canada as one of the few countries that will remain relatively unscathed.."
ReplyDeleteThe United States is by far our largest trading partner, accounting for about 76% of exports and 65% of imports. So, logically, if the US economy suddenly and totally tanked, we would go unscathed? Dream on, eh!
We are all on this ship of fool together. Anyone who thinks they will not be affected by this coming global depression that we are facing is living in the land of Ozz.
ReplyDeleteCanada will go down in flames like every other country. It's just a matter of time.
ReplyDeleteIt's the same policies leading to bankruptcy the world over.
It's all being done on purpose.
The United States will fare much worse in the end. Better to move somewhere else than stay there.
ReplyDeleteWell I'm Canadian and alot of people around me are truly up to there eyeballs in debts. It's only a matter of time when the bank hike up the rates....alot of consumers are on variable mortgages...it could get messy...stay tuned...Love paying all that taxes on HST and Carbon Taxes on my gas in British Columbia.
ReplyDeleteCANADIAN BANKS ARE IN BIG TROUBLE:
ReplyDeleteRoyal Bank ($624 billion assets) ;
$4.8 trillion total derivatives ;
$4.3 trillion OTC derivatives
TD ($432 billion assets) ;
$2.4 trillion total derivatives ;
$2.1 trillion OTC derivatives
BMO ($387 billion assets) ;
$2.7 trillion total derivatives ;
$2.0 trillion OTC derivatives
Scotiabank ($429 billion assets) ;
$1.3 trillion total derivatives ;
$1.2 trillion OTC derivatives
CIBC ($344 billion assets) ;
$1.2 trillion total derivatives ;
$1.1 trillion OTC derivatives
lets see according to official #s .Canadains owe $1.47 for every $1.00 they earn in net disposal income.IM no rocket science but when rates rise which they will do without argument sometime down the road there will be a collective "Houston we have a problem"Whan the Government punchbowl is removed that problem becomes a catastrophy.Anybody concur?
ReplyDelete