Canada Has World's Largest Consumer Debt

[Economy 53,072]

https://www.google.ca/amp/s/www.cnbc.com/amp/2017/11/24/canadas-household-debt-levels-higher-than-any-other-country-report-says.html

 

Canada's household debt now exceeds 101% of GDP (highest in the world) in other words consumer debt is higher than the Nation's $2 Trillion economy

 

However there are signs debt levels are coming down as the Government continues to try and engineer a soft landing with tougher mortgage regulations and stress tests which has cooled the housing market over the last year. Banks are also extremely well capitalised to withstand any financial crisis were it to occur. The Federal Government also has low debt giving it room for extraordinary fiscal stimulus if required.

 

In addition Canada is the only major economy raising interest rates along with the US to encourage less borrowing and encourage more savings

 

Scandinavian Nations like Sweden and Denmark as well as Norway and Finland are next in line for highest debt and they continue to keep rates low...

 

While Canada is raising rates to 1.75% Sweden for example is expected to keep it at -0.5% until at least 2019. Keeping rates at negative is now a trend also followed by the EU and Switzerland as well

[Fatigay 21,229]

I blame this on the "pay in 24-36-48 interest-free payments" (until the interest come in once you have forgotten about them), the "special sales" every week for low-budget stores like furnitures etc, the "modern condos" to attract lower middle-class people, and encouraging them to take mortgages for 50 years, the excess of car ads and deals in a world where we all preach about environment, the huge amount of low-salary jobs in retail and food, and the uneducation system about personal finances management. 

Disappointed but not surprised.

[ImTired 3,956]

Putting all those ASIB soundtrack purchases on plastic...

[Economy 53,072]

3 minutes ago, thierryrreiht said:

I blame this on the "pay in 24-36-48 interest-free payments" (until the interest come in once you have forgotten about them), the "special sales" every week for low-budget stores like furnitures etc, the "modern condos" to attract lower middle-class people, and encouraging them to take mortgages for 50 years, the excess of car ads and deals in a world where we all preach about environment, the huge amount of low-salary jobs in retail and food, and the uneducation system about personal finances management. 

Disappointed but not surprised.

But other countries have similar stuff

 

I think what happened in Canada (and Scandinavian countries which are almost as bad) is that our financial system didn't fail in 2008 like in most of the world and our banks kept lending and low interest rates to stimulate economy only made people borrow more

 

In the US and many other nations credit froze and ppl were reluctant to borrow as well while in Countries like Canada, Norway, Sweden, Finland, Denmark etc people binged on the cheap credit and housing markets also blew up

 

At least in Canada rising rates and new mortgage rules have been moderating the situation. In Scandinavia debt is still rising and soon may surpass Canada in the future

[AlexanderMagno 10,746]

I don't understand how the most economically stable countries, with the best quality of life, basically the best countries you can hope to live in, are the ones who have the largest consumer debt  how does that work, how is it possible for them to still be so financially stable?

[Economy 53,072]

12 minutes ago, AlexanderMagno said:

I don't understand how the most economically stable countries, with the best quality of life, basically the best countries you can hope to live in, are the ones who have the largest consumer debt  how does that work, how is it possible for them to still be so financially stable?

These Countries mostly Canada and Scandinavian Countries didn't go thru the same cycle in 2008 most of the world did

 

The financial crisis that made financial systems collapse and require bailouts caused banks to lend a lot less and consumers were cautious and didn't want to take out loans anyway

 

What happened is that there was a phase of deleveraging where consumer debt fell as a result (in the US deleveraging lasted until about 2012 or so)

 

In Canada and in Scandinavian Countries the economy was forced into recession as well yes but it wasn't as severe as much of the world and banks didn't totally fail and kept lending. And because rates dropped as a result of the recession consumers binged even more on debt and housing markets and retail went on a sugar high

 

While most of the world had falling housing markets, less lending etc, Canada and Scandinavia made up for reduced exports with more borrowing and relied on housing market and the domestic retail and service sector to ride out the global slump

 

But this came at a cost. While other nations had a correction in household financial imbalances after 2008, in these Countries their resilience in 2008 prevented the correction and now they are actually worse than they were then

 

Canada always had trade surpluses before. Ever since 2008 when our exports fell from bad world economy but our imports surged, we've had trade deficits every year since as we consume a lot more than we produce.

 

That has been improving tho thanks to strong US economy, last month we had our first trade surplus in a long time. With the US providing support, our economy has not tanked despite housing market and consumer spending now softening with rising rates.

 

Scandinavian Countries don't have that advantage tho as their biggest trading partner the EU remains in a relative slump and they haven't been able to start raising their rates like Canada has. Sweden even has their rates in the negative at -0.5% because their debt economy has no other source of growth and desperately needs consumers to keep spending

[Economy 53,072]

20 minutes ago, AlexanderMagno said:

I don't understand how the most economically stable countries, with the best quality of life, basically the best countries you can hope to live in, are the ones who have the largest consumer debt  how does that work, how is it possible for them to still be so financially stable?

Ahhhhh I just saw ur profile ur from Portugal?

 

Antes de eu mudar pró Canadá eu vivia em Portugal

[AlexanderMagno 10,746]

13 minutes ago, Economy said:

Ahhhhh I just saw ur profile ur from Portugal?

 

Antes de eu mudar pró Canadá eu vivia em Portugal

Lucky boy haha mesmo com os problemas na economia do Canadá, a de Portugal é pior lol

 

I really don't understand Finance and Economics very well, so I always pay lots of attention to your threads  

 

(não sei se ainda falas muito português, por isso vou tentar continuar a falar inglês haha)

[Economy 53,072]

11 minutes ago, AlexanderMagno said:

Lucky boy haha mesmo com os problemas na economia do Canadá, a de Portugal é pior lol

 

I really don't understand Finance and Economics very well, so I always pay lots of attention to your threads  

 

(não sei se ainda falas muito português, por isso vou tentar continuar a falar inglês haha)

Falo mais ou menos. Tive 8 anos quando vim pra aqui

 

And Canadas issues are not severe compared to most Nations. People chose to binge on debt in most cases. I never borrow unless I really have to so I have no debt, I'm not a part of this statistic lol