Friday, December 16, 2011

The zombie-banker lives and roams the earth

Another follow-up;

Craig Alexander, TD's chief economist - it pains me to reference a classic neoclassical bank economist - noted on Lang and O'Leary last night that Canada's debt to income ratio is high less because of increasing debt and more because real wages are falling.  So the deleveraging I mentioned a few posts back continues slowly, mitigating spending, and slipping wages continues, also mitigating spending. It looks like stagnation or deflation on the horizon, but in either case Canadians are still just swirling around in an economic whirlpool in which they could be sucked down at any moment.

With shrinking wages, it might be tempting to take on more debt to maintain one's household, and of course today's low interest rates are designed both to encourage borrowing - this is how bankers make money after all - and to allow banks themselves to be speculative in their own money-making investments with less risk. Beware. As Max Keiser says, the zombie-banker lives and roams the earth and might be the process of destroying the EU, for it is bankers, not even neo-liberal politicians, in charge, almost all of whom have ties to the vampire squid.

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