“…or (B) The locals are trying to keep up with the Chinese version of the Joneses and heavily indebting themselves in the process.”

A must read commentary by Ben Rabidoux (at The Economic Analyst 14 June 2011) on a must read report, ‘Have Canadian Consumers Reached
Their Limits?’, Certified General Accountant Association of Canada
. Excerpts-

“If we are to preserve our orthodox economic system, it is time to empower Canadians to engineer an economy which relies less on immediate consumption, excessive leveraging, and hardship – one that commands a cultural shift more befitting of our resources and our experiences.” – CGAAC

“I also find it amusing that in BC, the land where wealthy immigrants are purchasing homes with suitcases full of cash….or so the story goes….the debt service ratio and total indebtedness is by far the worst of all provinces. How do we reconcile this data except to say that: A) The buyers overwhelmingly appear foreign, but are still taking on mortgages to buy….or B) The locals are trying to keep up with the Chinese version of the Joneses and heavily indebting themselves in the process. Neither of these are good. Clearly it is debt that is driving the BC market, just as in every other market in Canada, though the Hot Asian Money story is quite likely what is causing the locals to line up in droves for a lifetime of debt servitude.” – from Ben’s commentary
[Frequent readers here know that this has been our thesis for some time; the debt numbers back that up. – vreaa]

One chart of oblique interest (answers that question “Is that Beemer purchased or loaned?”):

5 responses to ““…or (B) The locals are trying to keep up with the Chinese version of the Joneses and heavily indebting themselves in the process.”

  1. I don’t know… are lease payments considered as loans? My bet is most BMers and Mercs are leased.

    Will be interesting to see how the government decides to squash this bug.

  2. As I pointed out here last year, in 2009 a full 1/8th of the Provinces GDP was created by lending people money so that they could buy homes to live in (yes, that was a separate category).

    1/8th or 12.5% of the entire economy in BC is generated by people indebting themselves. How much is BCs GDP worth again?

  3. I must buy one of those “Don’t laugh its paid for” bumper stickers, just to rub it into the faces of all the a-holes in this city.

  4. midnite toker

    That explains why used cars are So cheap… never seen So many sweet rides on Craigslist for under $2000

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s