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For the First Time, Canadians Now Richer Than Americans


key2thecup

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When all your risky loans are insured by a federal crown corporation (the CMHC) it's hard NOT to look pretty good.

Should our housing market fall (from it's record high levels measured both from ratios of prices to income and prices to rental costs) not only would we get the hit to all the people that are leveraged but we would all be the proud owner of the company that has insured close to 600 billion dollars of those loans.

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The line '...fiscally conservative...' has nothing to do with the 'Conservative Party'. Note the lower case and upper case 'c'. Canada's fiscally conservative policies pre-date the current government. Perhaps most importantly, fiscal conservatism refers to our current banking regulations, which Paul Martin and Jean Cretin (big L Liberals and small c fiscal conservatives) deserve a lot of the credit for. During their tenure many banks in the US and Europe were merging and deregulating, and many suggested that Canada follow the same route. We didn't, and have those decisions to thank for our current system holding up so well.

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Our own wealth is intimately tied to that of America, so I wouldn't crow too much. We may be richer per capita than American right now, but we are undoubtedly poorer per capita than we were five years ago before the crash, so to gloat at America's even worse collapse doesn't make much sense. I know personally my own financial and career situation has taken a major hit since summer '08, I'd much prefer for the American economy to still be rolling along, with Canada drafting behind like a NASCAR teammate.

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One more as well. While Americans at one point were in debt relative to incomes at about 150% debt to income right before the crash they have been getting out of debt and are now at 110% average. Not great, but better.

Meanwhile in Canada the average person is now more in debt relative to income than the US was at it's worse. Sure we might have higher valuations right now but a LOT of it is highly leveraged.

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