Canada In Danger Of Debt Collapse, Debt Reaches 180% of Income

[Economy 52,853]

https://www.bnnbloomberg.ca/canadians-need-to-mind-dangers-of-debt-former-cmhc-chair-1.1577327

 

 

Canadas abnormally high consumer debt is very high even by developed world standards and economists are once again sounding alarms that trends cannot continue this way

 

For a number of different factors Canadas housing boom and debt binge never ended up in a bust like in USA and phychologically Canadians dont perceive real estate as something that ever goes down after decades of only increases

 

One silverlining detail of Canadas very high debt is that most debt is mortgage debt which means most highly indebted individuals have a big asset (house or condo) backing the debt. However as weve seen in other Countries, that equity does little for consumer or economy if rates rise and ppl cant handle payments or if values fall sharply 

[bionic 50,111]

The bubble is about to burst and I guess a new 'once in a lifetime' (hahahahahahaha) global financial crisis is imminent

[Economy 52,853]

15 minutes ago, bionic said:

The bubble is about to burst and I guess a new 'once in a lifetime' (hahahahahahaha) global financial crisis is imminent

I dont know if Canada would cause a global financial crisis were only the 10th largest economy (GDP around $2 Trillion). Its still among the largest economies but were not USA or China level impact

 

Also this bubble has been supposibly about to burst for 10 years and it refuses to. I think a multitude of factors are preventing it (so far) from happening 

 

 

[PunkTheFunk 125,703]

All these doom and gloom headlines but nothing actually happens. 

[Economy 52,853]

33 minutes ago, PunkTheFunk said:

All these doom and gloom headlines but nothing actually happens. 

These predictions started in like 2010. I was still in highschool

 

In my opinion this severe imbalance CAN go really wrong but its not a bubble thats gonna pop itself. As long as rates stay low, population growth high fueling demand and employment in good shape, nothing is gonna chance cuz ppl will still make their payments and low realestate vacancies will continue to spur bidding wars

 

Its one of those bubbles that undisturbed will not pop under ots own weight, it needs a trigger

 

Either significant interest rate increases, a severe recession (2020 recession doesnt count cuz most jobs lost were low paying service sector jobs from people less likely to own a house in the first place and on top of that we had all this CERB financial support)... or a rapid change in immigration policy

 

If the economy and market stays undistrubed, these doom and gloom scenarios i think wont happen