By Michael Snyder, on August 31st, 2016Things have not been this bad for the Canadian economy since the last global recession. During the second quarter of 2016, Canada’s GDP contracted at a 1.6 percent annualized rate. That was the worst number in seven years, and it was even worse than most analysts were projecting. This comes at a time when bad news is pouring in from all corners of the global economy. While things in the United States are still relatively stable for the moment, the same cannot be said for much of the rest of the planet. Canada in particular has been hit very hard by the collapse in oil prices, and the massive wildfire in northern Alberta back in May certainly did not help things.
For many years, high oil prices and booming exports enabled the Canadian economy to significantly outperform the U.S. economy.
But now conditions have changed dramatically, and all of the economic bubbles up in Canada are starting to burst. This includes the housing bubble,
as we have seen home sales in the hottest markets such as Vancouver drop through the floor late in the summer. In fact, it is being reported that home sales during the first two weeks of August in British Columbia were down a whopping 51 percent on a year over year basis.
Do you remember the housing bubble in the U.S. that helped fuel the last financial crisis? Well, a very similar bubble is now bursting up in Canada, and some investors have positioned themselves to make a tremendous amount of money when the whole thing comes violently crashing down.
The truth is that the global debt bubble is at an all-time high, the banks are being more reckless and are more vulnerable than ever before, and troubling economic numbers continue to pour in from all over the planet.
The stage is certainly set for the next major global economic crisis, and it isn’t going to take much to push the world over the edge.
DYI Comments: Is Canada the canary in the coal mine? Very well could be as this recovery -as much as it's been - has been in effect since March of 2009. Very long in the tooth as the expression goes! The business cycle has not been repealed I can assure you of that. With over valued markets and an economy dancing on the head of a pin between slow growth and recession our model portfolio remains very defensive and rightfully so. Better values are ahead.
Updated Monthly
No comments:
Post a Comment