Canada Financial Crisis Likely Despite Massive Stimulus

[Economy 52,925]

https://www.bnnbloomberg.ca/bank-of-canada-warns-of-excess-business-household-debt-1.1436354

 

The Central Bank of Canada is concerned that despite massive stimulus, Corporate loans, 75% wage subsities for small businesses, rent assistance small and medium size  businesses as well  and $2000 checks sent to individuals

 

The Government is running over a decade worth of deficits in a single year trying to keep all aspects of the economy afloat especially individuals and small businesses. The Government is even rolling out a new program that would see small businesses have 75% of their rent obligations payed off each month

 

However Canada is such a highly leveraged country with very high mortgage debt from a long housing boom (currency adjusted average home in Canada costs nearly double in USA) and business debt that it has no resistance whatsoever to any kind of shock

 

The Central bank is concerned massive insolvencies are inevitable and a financial crisis may hit the Country hard despite generous benefits programs

 

The bank is printing a lot of money to buy up troubled assets and help finances government bonds for spending

[DeanWinchester 41,390]

It was expected

[Economy 52,925]

To put this into perspective in 2007 US consumer debt reached an all time high of 134% of average annual income

 

In Canada right now it's 177%

 

 

[Economy 52,925]

8 minutes ago, DeanWinchester said:

It was expected

I don't get how Canada got so dam drowned in debt tho

 

I get that the unprecedented housing boom is a big factor cuz u have to be a slave to debt for life to buy realestate in most cities in this country now

 

But car loans, credit card debt and business debt is also extremely high

 

Canadians are so bad with money. I've known so many people in financial trouble that threw away their phone to buy a new one cuz they just needed that new iPhone

 

It's also such a Canadian thing to go to Cuba, Mexico or Dominican Republic in the Winter whether you can afford it or not

 

like I get life is also really tough for many especially single parents or ill individuals for example with medical bills or minimum wage earners I get that. But that's true in other Countries too and these individuals are also not the ones that make up most of the high debt statistics anyway. People in this Country are just really bad with money

 

 

[AJRocketMan 2,684]

1 hour ago, Economy said:

Canadians are so bad with money. I've known so many people in financial trouble that threw away their phone to buy a new one cuz they just needed that new iPhone

like I get life is also really tough for many especially single parents or ill individuals for example with medical bills or minimum wage earners I get that. But that's true in other Countries too and these individuals are also not the ones that make up most of the high debt statistics anyway. People in this Country are just really bad with money

Exactly! And so are you. 

[blankpaper 21]

12 minutes ago, AJRocketMan said:

Exactly! And so are you. 

What was the point of this comment lmao 

[DeanWinchester 41,390]

1 hour ago, Economy said:

To put this into perspective in 2007 US consumer debt reached an all time high of 134% of average annual income

 

In Canada right now it's 177%

 

 

Do you know how many people I know are on disability or government benefits and then walk around with apple watches, new iPhones and buy new cars? Too damn many.

[Economy 52,925]

20 minutes ago, AJRocketMan said:

Exactly! And so are you. 

I beg to differ. I never replace my phone before it's busted, go on vacations I can't afford and I don't spend almost any money on non essentials

 

I saved up $50,000 ish before I got married

 

And the thousands I got in debt by while married because of job losses, unexpected bills and an ex with spending problems, I recently fully paid off despite receiving little on EI and only finding a new job 2 weeks ago

 

So I think I can proudly say I'm responsible with money 

 

Have I ever spent money on something I regretted tho? Yes. I took personal training which cost quite a bit cuz I originally planned to do it as a career and wanted experience and those plans changed so I regret spending that money now

[Economy 52,925]

14 minutes ago, DeanWinchester said:

Do you know how many people I know are on disability or government benefits and then walk around with apple watches, new iPhones and buy new cars? Too damn many.

Same

 

Don't get me wrong, I'm not trying to imply that struggles are all peoples fault. I've been in countless threads about income inequality and people not being paid fairly for the productivity gains etc. I'm not saying the general population isn't a victim of an unfair system

 

But one issue being true does not automatically cancel out the other. Regardless of many not being paid as much as they should be, it doesn't change the fact that many individuals make poor decisions

 

And Canadians are particularly bad. I just read an article about how the average Canadian saves only 1/3 of a typical American (and Americans are not even big savers) so almost nothing despite the fact that we have higher minimum wages, and higher net benefits of free services like healthcare vs taxes

 

And like I said, the poorest people are not even the ones that account for all this debt, I guess they force themselves to scrutinize every purchase... People higher up the chain, at least middle class and upper middle class make up the largest debt ratios

 

I've met so many individuals with a household income close to 6 figures and they still manage to get into problems

 

My Cousins (they sold their house and moved back to Portugual actually) while they were here in Canada had such a high income and still blew it all. And still had the nerve to go on a vacation to Cuba after missing a car payment

 

The dad was an experienced mechanic that made almost $40/h the wife I don't know her wage but she worked full time, both kids had jobs and the grandma lived with them and contributed some rent with her pension

 

They still managed to nearly go bankrupt and had to sell their house to pay their debts and then moved back to Portugual. It was insane 

 

[AJRocketMan 2,684]

1 hour ago, blankpaper said:

What was the point of this comment lmao 

Just to be funny 😂

[Economy 52,925]

44 minutes ago, AJRocketMan said:

Just to be funny 😂

I thought maybe u might have thought I was bad with money cuz I went thru some financial difficulty and debt for a couple years

 

Cuz I actually save a lot. I just went thru a lot of bad luck after getting married. But at least im finally debt free 

[Mr S 8,796]

3 hours ago, Economy said:

Canadians are so bad with money. I've known so many people in financial trouble that threw away their phone to buy a new one cuz they just needed that new iPhone

 

It's also such a Canadian thing to go to Cuba, Mexico or Dominican Republic in the Winter whether you can afford it or not

This is true for Americans too. And probbaly most first world countries.

[DiskoBaby 1,929]

2 hours ago, DeanWinchester said:

Do you know how many people I know are on disability or government benefits and then walk around with apple watches, new iPhones and buy new cars? Too damn many.

People on disability need cars and phones. Let's not act like they're buying retail prices for an iPhone or buying brand luxury new cars. 

[Economy 52,925]

12 minutes ago, Mr S said:

This is true for Americans too. And probbaly most first world countries.

Few Countries have the exorbitant debts Canadians have

 

In fact the only countries with simmilar levels of debt are Australia, Netherlands, Denmark, Switzerland and Finland

 

One thing all these Countries have in common is that they all weathered the 2008 great recession/financial crisis better than most of the world and I think consumer confidence remained and people weren't taught a lesson so to speak.

 

In America the 2008 crisis seems to have taught more financial conservatism to the population. The statistics show a somewhat improved savings rate and lower credit accumulation after the 2008 crisis

 

But in Canada we never had that. The statistics show a debt binge that has never ended and the same probably happened in the other Countries I mentioned

 

The housing boom that started in the early 2000s here also did not get interrupted and to this day is still going (our homes are now on average twice as high as in the US) and refinancing home equity gains for purchases people can't afford is very popular here.

 

Based on statistics, Americans never stretched themselves to the level they did in these Countries even right before the crisis

[Mr S 8,796]

6 minutes ago, Economy said:

Few Countries have the exorbitant debts Canadians have

 

In fact the only countries with simmilar levels of debt are Australia, Netherlands, Denmark, Switzerland and Finland

 

One thing all these Countries have in common is that they all weathered the 2008 great recession/financial crisis better than most of the world and I think consumer confidence remained and people weren't taught a lesson so to speak.

 

In America the 2008 crisis seems to have taught more financial conservatism to the population. The statistics show a somewhat improved savings rate and lower credit accumulation after the 2008 crisis

 

But in Canada we never had that. The statistics show a debt binge that has never ended and the same probably happened in the other Countries I mentioned

 

The housing boom that started in the early 2000s here also did not get interrupted and to this day is still going (our homes are now on average twice as high as in the US) and refinancing home equity gains for purchases people can't afford is very popular here.

 

Based on statistics, Americans never stretched themselves to the level they did in these Countries even right before the crisis

Fair point.

Regarding realestate, isnt it just Vancouver and Toronto that are crazy. Just like the US has New York and Seattle etc.