Currency Wars: The Maple Syrup Edition [Chart]
Loonie plunges to 6-year lows, BoC concerned about “financial stability risks”
The Chart of the Week is a weekly feature in Visual Capitalist on Fridays.
Global monetary policy these days is a fast moving stream. It’s far easier to paddle along with the current and simply hope that there are no waterfalls or sharp rocks further down the way.
All is Fair in Love and War
The gamble of this vicious cycle has been that global growth would resume and the status quo could be pieced back together. Instead, Canada finds itself in the middle of a technical recession with two consecutive quarters of negative growth, crashing commodity prices, an iffy recovery for the United States, and the eurozone held together by a thread.
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Second, household debt for Canadians has reached an alarming 163.3%. Since 2007, it is estimated that only Greece has grown its household debt more than Canada. Further, a recent report by BMO says that Canadian households carry an average of $92,699 in debt, and pay $1,165 each month to service it. In the poll, respondents said that if interest rates were raised two points, that 64% of them would feel “stressed” servicing their debt. One quarter of respondents would feel “very stressed” if that happened. That’s only if the benchmark interest rate reached 2.75%, which is basically the lowest it ever sunk to in the 80’s and 90’s.
