The western nations are saddled with so much debt that the western countries (America, U.K, France, Germany, Japan) economy is going to collapse. There is no way that these nations can pay back the loans from the worthless bonds / treasuries that they sold to other countries.
In addition to the oil price and Toronto Stock Exchange plunging from its high of 15700 points, now with the surprise rate cut by the Bank of Canada, the CAD dollar is taking a hit and along with that the Canadian Bond yields are going down too….Ouch.
The oil plunge will cause significant problems in western Canada, particularly Alberta which is now seeing huge layoffs in the oil fields and that will have ripple effects to be felt within 6 months.
Remember in 2008 the big catalyst to the stock market and economy blowing up was the “Subprime Mortgage” debt mess. After the beginning effects of the subprime debt was felt by the economy, all stock markets around the world plunged.
Earlier in the day the Toronto Stock Exchange (TSX) dropped 292 points, then it went down to 391 points.
Then the TSX went lower by 483 points.
After lunch however, it really tanked lower. As you can see from the weekly chart, chart below, that it has failed to go above 15550 and is plunging down to 13600 points. If it breaks that on the downside then watch out.
