"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'
The Federal Government may announce a "balanced budget" going into the next election call but unless Canadian employees can reverse their debt to income ratio trend by either lowering debt or raising income, householders along with the Federal Managers will not be participating in productive economic spending in any big way.
Deutsche Bank reveals 7 reasons why ‘Canada is in serious trouble,’ starting with a 63% overvalued housing market. Financial Post, Business Insider, Andy Kiersz, January 8, 2015
If Treasury Yields are a measure of price and wage inflation, it's just not happening.
The top panel shows Canadian Government Spending vs Labour Force Participation and the lower panel shows Canadian Jobs Added on an Annual Basis all since 2008.
The two biggest line items of Federal Government Expenditures as of 3Q 2014 are:
Government spending on itself and the household sector combined with ultra low borrowing rates have not yielded growth in Canadian Labour Force Participation.
Jerry Maguire - Show me the Money
Stealth Money ?
Vancouver BC continues to rank as the least affordable city out of the 35 largest Canadian cities with a multiple of 10.6 times median household income required to buy a median priced house.
Compared to Vancouver, Toronto's big housing un-affordability spike looks rational if one considers population size (2.5x), and volume of residential sales and absorption rate (both over 2x) and Federal Government funding transfers that are 3.3x more to Ontario than to BC.
The dynamics of size and government compacts with the voter have helped to accelerate, Toronto's housing un-affordability over the last 4 years while Vancouver's un-affordability appears to have triggered a limit to negative cash flow prostration.
MORE DEMOGRAPHIA CHARTS & DATA
PRICED OUT OR PRICED IN?
Are you worried about being PRICED OUT of real estate because interest rates are going to zoom?
Or are you anxious about being PRICED IN because the commodity bust is widening?
A solution to these stressful thoughts is to move more to cash.
If rates do zoom you will be able to move cash into higher rates of return or if the asset value bust continues, you will be able to buy more value.
The charts above show the ongoing DEFLATION in consumption prices and wage earnings. The top panel is the MIT Billion Prices Project which tracks online in real time the high-frequency price data, as well as the US inflation index (CPI). The lower panel is the U.S. FRED chart of Y/Y total private average hourly earnings of all employees with the data plotted year over year to gauge the momentum. Both series are clearly down since the 2009 Pit of Gloom.
Without wage inflation, price inflation evaporates with every actor's change in sentiment from bull to bear.
Gallup Poll January 12, 2015
45% (U.S.) say it's a good time to find a quality job (the highest since 2007 prior to the bust and the Pit of Gloom)
The Low point on this measure was 8% in 2009 (after the pit of Gloom) and in 2011 (after the top in Commodities)
Ukulele Orchestra - Should I Stay Or Should I Go
Beavers, Bears, Dragons, Eagles
History, Charts & Curated Readings
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense