Individual Canadians and Canadian Governments took on more debt during the recession. Interest rates have been at historic lows, and can only go up. Will individuals be able to service debt at higher interest rates?
Author: Michel A. Bell
Michel A. Bell is a former senior business executive, author of seven books — including his first children's book published in 2022 — speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel is a Fellow of the Chartered Certified Accountants (UK), holds a Masters of Science in management degree from Massachusetts Institute of Technology and a Doctor of Business Administration honoris causa from Briercrest College and Seminary. He is founder and president of Stewarding God's Resources.
The Wall Street Casino And Too Big To Fail
During the global financial crisis in 2008, as he battled to “keep the system afloat,” I listened carefully to former USA Treasury Secretary Hank Paulson’s frequent pronouncements. I was convinced he was too close to investment banks, and he exacerbated the crisis by his reactions: fear, panic, and myopia. After reading his book, I am more convinced.
Kudos to Canada Against the Absurd Bank Tax
Kudos to Stephen Harper’s conservative Government for standing up to the G-20 finance ministers and warding off their absurd, crazy, ill-conceived global bank tax. If the G-20 folks explained to grade 10 students, the greed and dishonesty which brought down the global financial system, I believe the students would agree with Canada’s position!
Two Housing Myths to Dispel
During the recession, Canadian consumers continued to spend and take on more debt because, in my view, they have bought several myths. Here are two which we must dispel or we will fall over the debt precipice: First, it’s always better to own than rent. Second, house prices will always rise
Canada Liberal’s Deficit Reduction Goal
The leader of the Federal Liberals, Michael Ignatieff, says, two years after they are elected, they will reduce the Federal deficit to one percent of GDP. Based on today’s deficit, that’s about $40 billion reduction. But I haven’t heard mention of his plans to do this. Isn’t it great to be in opposition? Promise anything; many people will believe, and millions will vote for you! Perhaps Michael Ignatieff knows he will sit in opposition for a while and the deficit will be around his target when (if) he is elected.
Charities’ Administrative Costs
My wife and I support several charities. Usually, in December of the previous year, to each charity, we issue monthly post dated cheques for the following year. Still, monthly, they bombard us with paper. Yearly we become more concerned about the volume of paper we get monthly
Vanishing Government Deficits
I am surprized that given the growing size of personal household debt, the Throne Speech had this statement: “Canadians live within their means and expect their government to do the same…” Hopefully, the government will aspire to do better than households! With household debt of $1.3 trillion, we are on the cusp of a major personal debt crisis.
Unparalleled Greed With Interest Rates So Low For So Long
Two of my favourite quotes are from Einstein: “Insanity is doing the same thing over and over again and expecting different results.” And, “We can’t solve problems by using the same kind of thinking we used when we created them.” Canadian and US Governments are bent on proving Einstein wrong! Prolonged low interest rates fueled unprecedented greed by corporate executives and individuals, feeding off each other. Executives gambled with shareholders’ funds knowing there was no downside for them, but phenomenal upside.
Brand New Credit Card Regulations Banks Will Hate
New regulations in the USA, the Credit Card Accountability Responsibility and Disclosure Act of 2009, is bad news for banks reeling from housing bubble losses, and the recession. According to law firm Morrison & Foerster, these rules will cost banks $12 billion a year in lost revenue.