I came across this article through the Toronto Globe And Mail, at www.theglobeandmail.com, and it shows that Canada is definitely not immune to the present financial crisis. In this article, we find out that Canada has a serious debt storm brewing. Here is that article:
Paul Waldie and Steve Ladurantaye
From Saturday's Globe and Mail Published on Friday, Apr. 16, 2010 10:00PM EDT Last updated on Tuesday, Apr. 20, 2010 4:27PM EDT
Canadian borrowers are fast approaching a day of reckoning.
Lured by cheap money to buy up, buy in, expand and make over, families have pushed credit levels to a record high.
Now, mortgage rates are beginning to creep up and the Bank of Canada is poised to retreat from the record-low interest
The end of the free-money era has left consumers more vulnerable than ever, and those who threw caution to the wind could soon face costs they can't handle.
Household debt has surged three time faster than income in recent years and now stands at a record high of more than $1-trillion. Put another way, Canadians owe about $1.47 for every dollar of disposable
With debt levels this high, even a small hike in interest rates will be ugly for those whose incomes aren't rising fast enough to meet their day-to-day expenses.
Their woes could have a snowball effect: As debt-strapped consumers pull back, their credit woes spill over into the broader economy and risk putting a damper on the recovery.
For some, the trouble has already begun. John Silver, who runs Community Financial Counselling Services in Winnipeg, has seen his caseload increase 20 per cent from last year. “We re seeing more people coming in with more stress with regard to their debt,” he said.
Much of the recent rise in debt in Canada has been due to low interest rates, generally easier credit terms and fierce competition among lenders. Even when the recession hit in late 2008, Canadians remained far more confident than Americans in part because of a better housing market and stronger financial institutions. Consumer confidence in Canada is only about 20 per cent below where it was in 2007 whereas it's 60 per cent lower in the U.S.
NTS Notes: Canada, like the United States, is drowning in debt. The facts are right there for anyone to read about how "low cost borrowing" has ruined this once great nation just like it has ruined the United States. If and when the financial meltdown finally occurs, many Canadians will definitely be in serious trouble.
Consumer confidence in Canada may not be as low as it is in the United States, but once the US economy goes into collapse, Canada will definitely not be immune to the effects of such a collapse, due to this country doing the majority of its trading with the United States. Then we shall see what the level of Canadian consumer confidence becomes!
More to come