A few days ago I told you about the troubles facing the Canadian economy. Those troubles are based on mounting risks, and many of those risks are external, including the policies of the incoming Trump administration that could draw away business investment from Canada. Now, the Bank of Canada has released a YouTube video showing some of the internal risks to the economy, particularly the housing market and high household debt levels.
Watch the video below:
This video is just part of the mounting evidence of trouble facing the Canadian economy. A country with a strong internal economic situation can manage external risks. Alternately, a country with a strong external economic situation can manage internal risks. But the combo of external and internal weakness represents a dangerous moment.
Chart: Rising Household Debt
The response from those in “charge” of the economy has done nothing to build confidence. Just the opposite in fact.
The finance minister has even said Canadians will have to get used to an insecure job market and lower growth, which represents a weak and ineffectual response – giving in to pessimism instead of fighting for a stronger position for Canada.
The responses of policy-makers to difficult trends seems to be asking citizens to lower our aspirations, rather than embracing the potential of our changing world.
This makes sense, since those in power benefit from the system as it is – a system that concentrates power in the hands of big banks, big government, and big corporations. At the same time, all the demands of our new era point towards the need for decentralization, empowering individuals and communities, and fewer stifling rules and regulations that benefit bureaucrats at the expense of the rest of us.
The fact that the Bank of Canada feels compelled to issue a warning is a sign that even those in power are getting desperate. That’s what happens to those stuck in a control-based mindset rather than a mindset based on experimentation and empowerment.
Our leaders and institutions can issue all the warnings they want, but until we have a wholesale shift in attitude, things will keep going in the wrong direction.