How The Canadian Economy Could Crash


As I wrote yesterday, Canada’s economy is declining compared to many of our competitors. Growth is low and our leaders seem to have given up on expanding our prosperity.

But now, it’s becoming clear that behind the stagnation and the policies that are punishing Canadian workers, the very foundation of our economy is at risk.

The Bank of Canada has grown increasingly worried that rising consumer debt and unbalanced house prices put our economy at risk of a crash.

Joshua Slive – a senior policy advisor at the Bank of Canada has explained the process that could lead to a severe crash. Here’s how it could happen:

  • A rise in unemployment puts debt-burdened households in a tough spot – forcing many to default on their mortgages.
  • As mortgage defaults rise, banks and lenders start foreclosing on homes at a rapid pace – pushing the economy downward.
  • As the economy declines, other consumers delay home purchases until economic conditions get better.
  • Housing glut causes housing prices to plummet, leaving many people owning more than their mortgage is worth.
  • Consumer spending would fall, leading to job cuts, hours worked cut, and more unemployment.
  • Unemployment would cause more loan defaults, putting pressure on lenders, who would reduce lending – deepening the cycle of collapsing output.

That’s how the Canadian economy could crash, and it wouldn’t take much to make it happen.

Considering our out-of-touch government would rather cater to the globalist elites than support Canadian workers, more and more power keeps flowing to banks and big corporations. That wealth is taken out of the pockets of Canadians, driving people further and further into debt to stay afloat.

The actions of our government is creating the very conditions that are weakening our economy and putting us all at risk. But don’t expect them to wake up and figure that out anytime soon.

Spencer Fernando

Photo – Twitter

 


2 comments Add yours
  1. This condition is known as a debt deflation panic. Many old school economists predicted this would occur in 2008. Thanks to government debt and the continued foolish printing of currency, the problem only gets bigger. A true capitalist economy must be allowed to deflate, then rebuild. Look at it like a volcanoe, the longer it builds, the bigger the eruption….and collapse!

    1. Interesting point, I believe things could be turned around, but our leaders seem so stuck in a failed way of thinking that they won’t correct course until it’s far too late.

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