Canadian households now have the worst debt ratio of any G7 country

[CdnFox]

https://www.thestar.com/business/2023/05/23/canadian-debt-warning-signs-our-households-have-the-worst-debt-ratio-of-any-g7-country.html

Canadian households now have the worst debt ratio of any G7 country

Report from CMHC blames ballooning debt-to-GDP ratio on unaffordable housing and the rise in interest rates that is hammering already stretched homeowners.

At the end of 2021 Canada’s household debt-to-GDP ratio was at 107 per cent, according to the report.

Over the same period of time, household debt dropped in the U.S., U.K. and Germany and was nearly unchanged in Italy.

This is going to be a problem.

It would not take much of an economic crisis to lead to a domino effect on our economy that would be really bad. And this at  a time when our national and provincial debts are at all time highs  and the fed debt is insane. Which limits the gov'ts options to borrow during a crisis.

 

[Boges]

3 hours ago, CdnFox said:

https://www.thestar.com/business/2023/05/23/canadian-debt-warning-signs-our-households-have-the-worst-debt-ratio-of-any-g7-country.html

Canadian households now have the worst debt ratio of any G7 country

Report from CMHC blames ballooning debt-to-GDP ratio on unaffordable housing and the rise in interest rates that is hammering already stretched homeowners.

At the end of 2021 Canada’s household debt-to-GDP ratio was at 107 per cent, according to the report.

Over the same period of time, household debt dropped in the U.S., U.K. and Germany and was nearly unchanged in Italy.

This is going to be a problem.

It would not take much of an economic crisis to lead to a domino effect on our economy that would be really bad. And this at  a time when our national and provincial debts are at all time highs  and the fed debt is insane. Which limits the gov'ts options to borrow during a crisis.

So. . . we go back to near free loans to buy homes so people think they can afford homes that they can't? 

The goal was to cool the housing market off because of this and I think it has. 

 

[CdnFox]

23 minutes ago, Boges said:

So. . . we go back to near free loans to buy homes so people think they can afford homes that they can't? 

The goal was to cool the housing market off because of this and I think it has. 

 

nope. Not even close.

The housjng market took a dip from it's all time high not so much due to higher interest rates but volatility. People didn't know if the rates would go higher still or not.

Now that people feel the rates have stabilized they're jumping back in the market and prices have increased 4 months in a row, and will likely be back to that 2022 historic high point by the end of the year

https://www.cbc.ca/news/business/crea-housing-data-1.6843592

Worse - for people who need a mortgage and don't have cash - the actual cost of ownership in monthly payments is ALREADY higher than it was in 2022's peak before interest rates took off.

And with home buyers sitting on the sidelines it drove rent up so more investors will pay more money right now because rents will cover it.

Lowering interest rates would not solve anything, we need to do the right things now to stave off a very serious financial meltdown.

[Boges]

8 minutes ago, CdnFox said:

Lowering interest rates would not solve anything, we need to do the right things now to stave off a very serious financial meltdown.

And that would be. . . ? 

Raising wages to more reflect the recent inflation? No, that would be communism right? 

[CdnFox]

33 minutes ago, Boges said:

And that would be. . . ? 

Raising wages to more reflect the recent inflation? No, that would be communism right? 

well i don't know about communism but ti would be a bad idea.

Job one is to get money out of the economy.'  "inflation is always and everywhere a monetary issue".  Right or wrong we dumped hundreds of billions of dollars, much of it in unearned money, into the economy over the covid years.  That is ALWAYS going to run up inflation a lot. And much of our inflation comes from that. We have to remove those dollars.

Which is what higher interest was supposed to do but unfortuantely at the same time that the bank is sucking money out of the economy the liberals are dumping it right back in. So that has to stop.  It's literally like stomping on the breaks and the gas at the same time.

IN addition there needs to be some very targeted taxing.  Get rid of or reduce the carbon tax - it's a very significant factor in many critical things like food and it's easy to forget its one of our few cumulative taxes not just an end user tax.  Then, raise consumer taxes.  Perhaps gst to 6 percent and let provinces raise theirs by 1 percent as well. This is an effective way to cool the economy without driving up interest rates and it reduces the deficit. Why are we even using interest rates at this point - they target things like housing and food.  Such things are exempt from GST.

And consumption taxes cause people to spend less on buying things, which means they put their money to debt reduction.

Then we have to reduce immigration for a while to a level where it's not going to strain our systems and drive up housing costs for owners and renters. It would be great if the gov'ts also made a SERIOUS effort to increase housing construction at the same time.

Those would be a START -  it would go a long way in reducing inflation without driving our economy into the ground.

But of course - trudeau doesn't think about monetary issues. Soooooo.