I’ve recently come to understand “just how complacent” the general investment community is up in Canada. Now don’t get me wrong – I am an extremely proud Canadian. I love Canada as anyone so fortunate to have been born in Canada “should” love Canada. However…….
A recent article outlining the current “debt to income situation” in Canada, coupled with the recent “decline in housing sales” and recent rise in interest rates juuuuust might confirm what I’ve been fearing for some time.
The headlines continue to suggest an improving economy, and it appears that the vast majority of Canadians are still living under the guise that “nothing could possibly go wrong in the Great White North”.
I’m looking ahead to Canadian Dollar weakness….as well offer you some “additional reading” below the chart. Interest rates on the rise with the ratio of debt to income – not looking so great.
The US dollar has fallen vs CAD for the past 2.5 months! I’m watching the 1.2458 number ( a double bottom / area of support looking back to the big green candle there in April ) for the fall to stop – USD to move back to the upside.
Some time ago, Deutsche Bank’s chief international economist, Torsten Slok, presented several charts which showed that “Canada is in serious trouble” mostly as a result of its over reliance on its frothy, bubbly housing sector, but also due to the fact that unlike the US, the average household had failed to reduce its debt load in time. Read more below….and take it for what it is. Canada “reality check” most certainly on the horizon.