HOUSEHOLD DEBT, GDP, FDI & BALANCE OF TRADE at Brian Ripley's Canadian Housing Price Charts

Canadian Household Debt, GDP, Foreign Direct Investment and Balance of Trade and a Google Search Mexican Peso & Canadian Dollar Below

CLICK CHART TO ENLARGE

DEBT data are book value quarterly; GDP data are seasonally adjusted at annual rates; FDI FDO data are annual; NET TRADE data are seasonally adjusted monthly.

The widening spread between total household debt and household mortgages means we are borrowing even more to maintain lifestyle.
Foreign Direct Investment OUT higher than IN over the last 20 years means Canadian companies are investing outside of Canada to get a better return on Capital and Labour. For every $1 of investment coming in to Canada, $1.36 leaves (full year 2017 data)
Since the 4Q 2008 crash into the Pit of Gloom, the Balance of Trade has been negative for 70% of the time which means that OUR debt obligations continue to provide more stimulus to offshore than onshore producers.

NOTE ON #2 - Foreign Direct Investment
The difference between Capital Investment leaving Canada to Capital Investment entering Canada has widened dramatically since 2014 by 19%.
For every dollar coming into Canada
in 2014, $1.14 left
in 2015, $1.33 left
in 2016, $1.27 left
in 2017, $1.36 left
The 20 year widening trend is accelerating.

Canada Households Debt To Disposable Income

Households Debt in Canada increased to 173.34 percent of gross income in 2017 from 169.90 percent in 2017. Households Debt To Income in Canada averaged 126.12 percent from 1990 until 2017, reaching an all time high of 173.34 percent in the third quarter of 2017 and a record low of 85.94 percent in the first quarter of 1990. TradingEconomics.com

source: tradingeconomics.com

Clearly the post 2008 credit crash period and our monetary policy coming out of it has led not only to a furious bid in real estate assets with all its consequences of draining disposable income, but the gap between mortgage debt and other household debt remains high and wide relative to pre-crash times.

The other features of the chart show that in the decade before the crash as the commodity boom began to peak, our Foreign Direct Investment account flipped poles so that more Canadian capital was being invested offshore than offshore capital was being invested in Canada. Coming out of the March 2009 Pit of Gloom with monetary policy firmly presiding over state suppression of market interest rates, the shift in polarity in the FDI has little reason to flip back to the 1980's and '90's when more offshore investment capital came into Canada than capital leaving Canada.

With the 2017 FDI clocking in at another big "wide", the trend is now very clear, the flight of Canadian capital towards offshore workers is on. ITEM: "Investment outflow from Canada already underway in 'real time' says RBC Head. Toronto City News, April 1, 2018"

Cheap capital is in search of cheap productive Labour in an effort to realize a better return on investment from exploiting the price mismatch. Clearly this is working as our deeply negative Balance of Trade data suggest; we buy more than we sell, hence we supply net income to entities outside our "borders" financed and subsidized by our own cheap credit and our willingness to hock the future.

StatsCan April 2017 NOTES on 2017 FDI-FDO
SNIPPIT: "Canada's net direct investment position with the rest of the world widened by $22.1 billion in 2017 to $297.1 billion. Over the previous 10 years, the stock of Canadian direct investment abroad grew by 117.6%—nearly double the rate of foreign direct investment in Canada."

StatsCan 2016 Data: Product Trade and Investment
Canadian exports to Mexico: $7,632,046,528
Canadian imports from Mexico: $33,182,391,852 (4.4 times)
FDI into Canada from Mexico: $1,713 million
FDI into Mexico from Canada: $16,780 million (9.8 times)

CME 2012 Data: Canada is the fifth largest investor in Mexico. Currently, more than 3,000 companies in Mexico operate with Canadian capital. There are an estimated 2,500 Canadian affiliates based out of Mexico, the largest ones being Goldcorp, Bombardier and Scotiabank.

Globe & Mail MAR 20, 2017 The rise of longer car loans, a major risk to household finances
The Financial Consumer Agency of Canada also released a report on trends in the auto finance market, in February of 2016. Among the alarming findings is the increased number of consumers trading in old cars with negative equity. That means that instead of getting a credit for the value of a trade-in to put towards their next car, they owe more than the car is worth. It has become common to roll this negative equity into new vehicle loans, and buying a $30,000 car can now, for example, come with an initial loan balance of $35,000. In fact, the average amount of negative equity rolled over into a new car loan stood at $6,659 in 2016 according to Canadian data from J.D. Power. To clarify, that data only refers to those who are underwater at time of trade-in.

GOOGLE SEARCH MXN CAD BELOW

CLICK CHART TO ENLARGE