No-one Is Perfect

Canada is probably the wealthiest nation in the world, on a per-capita basis, and is reasonably well managed from a fiscal point of view. But Canadians are human too and are perfectly capable of the same kinds of irrational behavior as any other national group.

Canada has led something of a charmed life, economically, as a result of the speculative bubble in commodities which are the mainstay of the Canadian economy. This has encouraged the populace to believe that it is “immune to gloom” and can safely indulge itself in bidding up asset prices with debt – especially real estate prices. Bloomberg points out that this has led to a bubble of bizarre proportions, which is beginning to pop. Later this year I expect that the commodity bubble will be leaking heavily, leading to a combination of circumstances, as Hirohito might put it, not necessarily to Canada’s advantage.

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