{"id":23269,"date":"2017-03-15T11:37:57","date_gmt":"2017-03-15T16:37:57","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23269"},"modified":"2017-03-15T11:37:57","modified_gmt":"2017-03-15T16:37:57","slug":"canada-flagged-for-recession-by-bis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23269","title":{"rendered":"Canada Flagged for Recession by BIS"},"content":{"rendered":"

Canada Flagged for Recession by BIS<\/a><\/h3>\n
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\"canadadebt\"<\/a><\/p>\n

This can\u2019t be good\u2026<\/p>\n<\/div>\n

As if Canadians needed more proof that the country\u2019s real estate is in a bubble, and that this misallocation has spread to other sectors of the economy, the\u00a0Bank of International Settlements released its latest quarterly\u00a0<\/a>confirming what any critical observer can see: binging on debt is rarely a good idea.<\/span><\/p>\n

Canada\u2019s debt-to-GDP gap is widening and even the central bank of central banks is concerned.<\/span><\/p>\n

The BIS uses its credit-to-GDP analysis as an indicator and predictor of troubling economic waters. They claim successes in predicting financial crises in the United States, England and a few other economies. Generally speaking, according to the BIS, when a country\u2019s credit-to-GDP gap is higher than 10% for more than a few years, a banking crisis emerges which is followed by a recession.<\/span><\/p>\n

Canada entered that territory in 2015, warmly welcomed by the Chinese who\u2019s debt-to-GDP gap has put them in the danger zone\u00a0for at least the last five years.<\/span><\/p>\n

In another parallel universe, perhaps Canadian authorities took the correct measures to counteract this high credit-to-GDP gap or to even prevent it from getting this out of control. But in our reality, we kept trudging across the tundra, mile after mile, pushing our credit-to-GDP gap up to 17.4%.<\/span><\/p>\n

China\u2019s \u201cbasic dictatorship\u201d means they can turn their economy around on a dime, or so goes the thinking. Perhaps they will better absorb the economic slap in the face compared to Canada\u2019s relatively freer market and less dictatorial government.\u00a0<\/span><\/p>\n

Still, both countries have a massive real estate bubble. In China, entire cities are centrally planned and built by government-connected contractors only to house absolutely nobody.\u00a0<\/span><\/p>\n

Wealthy Chinese families, witnessing the crony-capitalist chaos and subsequent malinvestments, have taken their hard-earned cash and moved it overseas. Enter stage-right the true north strong and free enough. Foreign speculation has helped drive up real estate prices in places like Vancouver and Toronto.<\/span><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Canada Flagged for Recession by BIS This can\u2019t be good\u2026 As if Canadians needed more proof that the country\u2019s real estate is in a bubble, and that this misallocation has spread to other sectors of the economy, the\u00a0Bank of International Settlements released its latest quarterly\u00a0confirming what any critical observer can see: binging on debt is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[15013,103,3725,7617,2902],"class_list":["post-23269","post","type-post","status-publish","format-standard","hentry","category-economics","tag-caleb-mcmillan","tag-canada","tag-debt-to-gdp","tag-mises-institute","tag-real-estate-bubble"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23269","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23269"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23269\/revisions"}],"predecessor-version":[{"id":23270,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23269\/revisions\/23270"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23269"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23269"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23269"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}