Canadians now have taken on large amounts of debt and with interest rates so low, home sales presses on. However, it is not just mortgage debt that Canadians have added to their balance sheets, credit card and line of credit debt has been soaring as well. This basically is a recipe for a disaster similar to what happen in the United States running up to 2008 economic crash to happen to Canada in the future.
When interest rates start going up, you will see lots of Canadian families having a harder time making ends meet along with higher gasoline prices and food inflation. It may also eventually lead to a real estate slow down and subsequently an economic downturn. The effects on the Canadian economy of record high consumer debt is yet to be seen, but whatever happens cannot be good for the future.
by Das Brain
Watch the video from The Globe and Mail
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