Canada’s household debt is now bigger than its GDP, for the first time

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OTTAWA — The insatiable appetite of Canadians for cheap credit has been well-documented since the Great Recession, as consumers piled on debt by ever-increasing numbers.

Now, household borrowing has reached a new milestone, of sorts.

For the first time, the level of debt held by Canadians has exceeded the country’s gross domestic product as the red ink spilled over in the second quarter to 100.5 per cent of GDP, up from 98.7 per cent during the previous three-month period. Continue reading

China Is Preparing To Shock The World

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After another wild week of trading in global markets, today one of the top money managers in the world told King World News that China is preparing to shock the world.

Stephen Leeb:  “Someone from the IMF just said that the chances are 99 percent that China will get approved for reserve currency status.  If they do (get approved), how long before China says, ‘Now that we are approved as a reserve currency, now that the world can trade with the yuan, we want to put a little more backbone in our currency, how about backing part of our currency with gold?’  That is definitely going to happen, Eric… Continue reading

The Fed Is Spooking the Markets Not China

Fasten your seat belts, this ride is getting interesting. Last week the Dow Jones Industrial Average was down more than 1,000 points, notching its worst weekly performance in four years. The sell-off took the Dow Jones down more than 10% from its peak valuations, thereby constituting the first official correction in four years. One third of all S&P 500 companies are already in bear market territory, having declined more than 20% from their peaks. Scarier still, the selling intensified as the week drew to a close, with the Dow losing 530 points on Friday, after falling 350 points on Thursday. The new week is even worse, with the Dow dropping almost 1,100 points near the open today before cutting its losses significantly. However, no one should expect that this selling is over. The correction may soon morph into a full-fledged bear market if the Fed makes good on its supposed intentions to raise interest rates this year. Have no illusions, while most market observers are quick to blame the sell-off on China, this market was given life by the Fed, and the Fed is the only force that will keep it alive.

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Washington, China, and the Rise of the Renminbi: Are the Dollar’s Days as the Global Reserve Currency Numbered?

Abstract

The U.S. dollar has dominated the international monetary system since the end of World War II. While the U.S. economy has generated weak growth since 2009, and accumulated a large sovereign debt, the dollar’s status as an international medium of exchange and reserve currency has not diminished. The Chinese renminbi (RMB), however, barely visible in international trade or financial flows just three years ago, appears to be blossoming. China is now the world’s largest trading nation, and more corporations, particularly in Asia, are beginning to invoice their business in RMB. The Chinese regime is calling for a reform of the international monetary system to expand the internationalization of the RMB. Speculation has begun about whether the U.S. dollar could be supplanted by the RMB. Such a development would jeopardize the enormous economic advantages that the U.S. has enjoyed by possessing the world’s dominant currency. Moreover, it would signal a relative decline in American prestige and global leadership. The answer to the dollar’s potential decline is not to seek obstacles to China’s or any other nation’s economic success, but to change fiscal and monetary policies at home in order to maintain the dollar’s competitiveness.The U.S. dollar has dominated the international monetary system for approximately 70 years. While the U.S. economy has generated weak growth over the past six years and accumulated a large sovereign debt, the dollar’s status as an international medium of exchange and reserve currency (currency held by foreign central banks) has defied the odds and has not diminished. Continue reading

This global economic ‘canary in the coal mine’ hasn’t looked this sick since the Great Recession

South Korea’s exports dropped by a huge 10.9% in dollar terms between May 2014 and May 2015, the biggest annual decline since the depths of the Great Recession in August 2009.

South Korean exports are a huge deal, and several economists view this figure as a global economic “canary in a coal mine.” Continue reading

Overall State of the Union – Unbiased Economics

The definition of the “rich” has become anyone who has investment income. Home ownership has declined since mortgages generally now want 20% down and taxes have risen. Of course, the socialists say this is not fair and the rich are getting richer yet this is not income from wages, but rather investment. The gains go predominantly to mutual funds and pensions not to mention foreign investment since retail participation has also declined since the Great Recession. This means the yelling and screaming is by no means reflecting a purely domestic situation. Furthermore, had Congress privatized Social Security long ago, then those funds would have been invested in the stock market so the very people they say are not participating would have a stake in the economy. Continue reading

Central bank prophet fears QE warfare pushing world financial system out of control

In short, it’s past the the point of no return and will result in a global market crash — possibly in 2015. We’ve all heard this story before and it surely sounds like a repeat from the last ten years of warnings, however, you can now see the wheels falling off as the central banks throughout the world are running out of options. Moreover, the only option they have is what’s exponentially compounding the problem. You might wonder how they could be so dumb, but on the other side you know these are experts with years of experience handling the situation. This leads to the next question: Is destroying the economy intentional? You can’t make 300 mistakes in a row and be called an idiot.

 

Former BIS chief economist warns that QE in Europe is doomed to failure and may draw the region into deeper difficulties

The economic prophet who foresaw the Lehman crisis with uncanny accuracy is even more worried about the world’s financial system going into 2015.

Beggar-thy-neighbour devaluations are spreading to every region. All the major central banks are stoking asset bubbles deliberately to put off the day of reckoning. This time emerging markets have been drawn into the quagmire as well, corrupted by the leakage from quantitative easing (QE) in the West.

“We are in a world that is dangerously unanchored,” said William White, the Swiss-based chairman of the OECD’s Review Committee. “We’re seeing true currency wars and everybody is doing it, and I have no idea where this is going to end.” Continue reading

Americans: One Small Emergency Away From the Street

In general, America is also one catastrophic event away from irreparable implosion.

 

Most Americans are only one paycheck away from the street, according to a new survey by personal finance website Bankrate.com.

The survey of 1,000 adults found that approximately 62 percent of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair.

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On The Verge Of The Next Economic Crisis, 62 Percent Of Americans Are Living Paycheck To Paycheck

Nearly two-thirds of all Americans are completely and totally unprepared for the next economic crisis.  As you will read about below, a new survey has found that only 38 percent of Americans have enough money on hand to cover “a $500 repair bill or a $1,000 emergency room visit”.  That essentially means that 62 percent of the people in this country do not have an emergency fund.  Even after the extremely bitter financial lessons that millions of Americans learned during the last recession, most of us are still choosing to live on the edge.  That is utter insanity, and when the next major economic downturn strikes most people are going to find themselves totally unprepared.

The number one thing that you need to do to get ready for the coming economic collapse is to build up an emergency fund.

Because of my website, people are constantly asking me what they should do to prepare for the coming economic collapse.

I think that they expect me to say something like this…

“Sell everything that you possibly can and buy gold and silver, go purchase a llama farm, and dig a bunker where you can bury 10,000 cases of MREs.” Continue reading

Billionaire Warns: Yellen Collapse ‘Will Be Unlike Any Other’

Another horrific stock market crash is coming, and the next bust will be “unlike any other” we have seen.

That’s the message from Jeremy Grantham, co-founder and chief investment strategist of GMO, a Boston-based firm with $117 billion in assets under management.

Grantham pulls no punches when assigning responsibility for the coming financial carnage. In a recent interview with The New York Times, he calls Federal Reserve Chair Janet Yellen “ignorant” and says the Federal Reserve all but killed the economic recovery.
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World risks fresh credit bubble, Switzerland’s BIS warns

Asset prices across the world have risen to heady levels not seen since the credit boom five years ago and may be losing touch with economic reality yet again, the Bank for International Settlements has warned.

The venerable Swiss-based institution – almost alone in warning of a global debt crisis in the build-up to the Great Recession – said it is rare for markets to gather steam at a time when the major forecasters are turning gloomy. Continue reading