Wednesday, December 14, 2011

We're in an economic whirlpool with no immediately conceivable way out

An addendum to yesterday's post with some additional observations referenced from Tavia Grant's report in The Globe and Mail today.

I suggested yesterday that we're in an economic whirlpool with no immediately conceivable way out, and Tavia suggests implicitly that what could suck us down to the bottom of that  pool is a significant jump in unemployment, falling house prices, rising interest rates or any combination of these - all of which I've mentioned as worrisome possibilities before in earlier posts, but which now take on a truly alarmist meaning.  Mark Carney also points out  that one in ten Canadians is in a vulnerable financial position, meaning that the cost of servicing debt consumes more than 40 per cent of his or her income.

Add to these observations everything I sadly offered yesterday, falling real wages, the lack of jobs and job creating initiatives, slipping stock prices, the absence of pensions in the case of many Canadians and, of those with them, a drop in their value because of eroding assets and we have ourselves an overwhelmingly serious economic crisis.

Why is it up to Mark Carney to tell it as it is? Where are President Harper and his bulldog, who, with the financial sector, are jointly responsible for this horrendous state of economic affairs? Would some courageous journalist please call them on this.

Note: Other stats from Stats Can that can be correlated with the above observations: The Daily, Tuesday, December 13, 2011. National balance sheet accounts 

1) Canadian household net worth declined 2.1% to $22.6 trillion, the second straight quarterly decline - probably because investment and pension assets declined.

2) Per capita household net worth dropped to $180,000 from$184,700 in the previous quarter.

3) Credit market debt  to assets reached a record high 20.1%.

4) Debt to net worth rose to a record high 25.2%

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