Thomas P 18,479 Posted October 17, 2016 Share Posted October 17, 2016 3 minutes ago, Luc said: High private debt in a country -> (possibly) financial crisis -> high unemployment, stagnating wages and stagnating purchasing power that's what I understood from a few articles. I have no degree in economics so correct me if I'm wrong. I'm only 15 this is all gibberish to me. I'll learn about it in civics next semester. I’m a simple guy to please, if you like Melodrama, we chill. Link to post Share on other sites More sharing options...
Whispering 18,865 Posted October 17, 2016 Share Posted October 17, 2016 17 hours ago, Luc said: I really can't imagine having so many debts though... like, the average person has like 50k debt??? How is that possible! Tip for all: only ever lend money for a mortgage. You really shouldn't lend for a car or other luxury goods. I know this doesn't count for the real bottom 10%, but most are able to live a sober life with what they earn. It's not responsible to lend too much. A car is a necessity in all but a very few places in the US. The majority of people don't have $15,000 plus sitting around to buy a car outright, so you are going to borrow for a car. The wise move is to buy a good, used car, pay for it in three or four years and then keep it for at least five more years. I don't know about Canada, though. I would think that they are in the same situation with needing to own cars for transportation. Link to post Share on other sites More sharing options...
Economy 53,158 Posted October 17, 2016 Author Share Posted October 17, 2016 1 hour ago, Whispering said: A car is a necessity in all but a very few places in the US. The majority of people don't have $15,000 plus sitting around to buy a car outright, so you are going to borrow for a car. The wise move is to buy a good, used car, pay for it in three or four years and then keep it for at least five more years. I don't know about Canada, though. I would think that they are in the same situation with needing to own cars for transportation. Unfortunately yes. With the exeption of the denser cities like Toronto, Montreal, Vancouver, Calgary etc where u can easily rely on public transit... Most cities are very suburbian and spread out. Most newer cities are also zoned so even if they have higher density living without a car is a big inconvinience Link to post Share on other sites More sharing options...
Economy 53,158 Posted October 17, 2016 Author Share Posted October 17, 2016 19 hours ago, LadyGagasGodSon said: And that's probably accounting only official bank statements or something cause like my family/relatives love to borrow/lend money from/to each other. Like home down payment kind of money lol and those go under the radar I don't know much about this kind of stuff but could this also be related to the rise of student loans and unemployment for recent university grads? I'm really lucky to not have borrowed a loan for uni, most of my friends owe so much and they just keep dragging their years in uni so as not to pay right away but then it just piles up more and no one seems to want to do an entry level job after earning a degree. I know I didn't 5 hours ago, Luc said: High private debt in a country -> (possibly) financial crisis -> high unemployment, stagnating wages and stagnating purchasing power that's what I understood from a few articles. I have no degree in economics so correct me if I'm wrong. The biggest issue is a major distortion created by the really heated housing market New home buyers have to borrow astronomical amounts of money to be able to buy a house. Then because they are stretched so thin, they have to borrow even more just to buy a car etc Our culture of winter Vacations in the tropics that many cant afford isnt helping Then theres old home owners. They know their asset appreciated so much that the wealth effect makes them more confortable to spend and even get into a little debt for stuff they dont really need But @Luc is right this increases the odds of a financial crisis because people could all start cutting down spending around same time when many people start to reach their limits. Defaults rising is also a real possibility Rates staying low and some bank cash reserve regulations we have in place tho should help avoid any crash as bad as in the US tho should the bubble pop or start deflating Link to post Share on other sites More sharing options...
doppelganger 4,023 Posted October 17, 2016 Share Posted October 17, 2016 Some countries do fine despite high household debt. But you're walking on thin line. It only takes one bank to go down, or a property bubble to send eveything tumbling down. It's much easier to fuel growth via consumer spending and encouraging property speculation than actual economic output. Link to post Share on other sites More sharing options...
manyatyau 262 Posted October 17, 2016 Share Posted October 17, 2016 that's why I sold my car and paid off my debts. In one year I can get another car if I can save 250$/month, but my debts will take forever. Link to post Share on other sites More sharing options...
Economy 53,158 Posted October 17, 2016 Author Share Posted October 17, 2016 1 hour ago, doppelganger said: Some countries do fine despite high household debt. But you're walking on thin line. It only takes one bank to go down, or a property bubble to send eveything tumbling down. It's much easier to fuel growth via consumer spending and encouraging property speculation than actual economic output. Much of northern Europe is in a simmilar situation to Canada Government finances are pretty decent and economy doing ok but household debt very high Finland, Sweden and I believe Denmark and Norway are in simmilar situations Link to post Share on other sites More sharing options...
N a t h a n 701 Posted October 19, 2016 Share Posted October 19, 2016 Yep. And as a canadian I can lay a lot fo the blame on Kathleen Wynne. She Single handles destroyed out Hydro and Electric companies by making them private and for profit. Link to post Share on other sites More sharing options...
Economy 53,158 Posted October 19, 2016 Author Share Posted October 19, 2016 2 hours ago, Nathan said: Yep. And as a canadian I can lay a lot fo the blame on Kathleen Wynne. She Single handles destroyed out Hydro and Electric companies by making them private and for profit. Her ideas are so backwards They are so socialist in areas they shouldnt be and like to over-regulate and micro-manage private sector But stuff that Should NOT be private like Hydro they privatize Mess Link to post Share on other sites More sharing options...
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