Juggling Dynamite

“We’ve seen this movie over and over again”– imprudent monetary policies encourage reckless behavior and a misallocation of capital resources so that risk seeking buyers and savings in our society become collateral damage of the quest to ‘rescue’ bankers at all costs.  I disagree that the ECB was right to roll out more insane terms yesterday, but the rest of El-Erian’s comments in this discussion are lucid.

Mohamed El-Erian, chief economic adviser at Allianz and Bloomberg View columnist, discusses the currency impact of policy changes by the European Central Bank and why governments must move beyond monetary policy. Here is a direct video link.

The Canadian Labour Congress (CLC) has proposed a plan called ‘One Million Climate Jobs: a challenge for Canada’ that will help Canada reduce its greenhouse gas emissions by a 1/3rd and create sustainable climate jobs, allowing workers to transition away from fossil fuels.  Labor and business are recognizing their shared opportunity in the transition to a sustainable economy.  Those who succeed will embrace the change and let go of antiquated models and thinking.

By collaborating with governments and employers, workers and unions can tackle climate change and ensure a just transition to a green economy.  Here is a direct video link.

Canada’s total reported consumer debt recently hit an even higher high at $1.621 trillion up from $1.529 trillion a year ago.  And a study released today by Equifax Canada finds that Albertans have the highest average debt load in the country with consumer debt delinquencies there jumping 25% in Q4 2015 over Q4 2014. Here is the chart by province at the end of 2015 and delinquencies are rising in 2016.
With the wave of Canadian boomers moving towards retirement and looking to live on savings, low rates that helped them borrow and spend over the past 30 years are now having the opposite effect–suppressing spending and financial strength. Equifax added a warning:

“Debt is often used as a tool for consumers to accomplish their objectives. However, as people get older, their income earning capabilities generally trend downward,” Equifax said in a release. “To increase their financial security, Canadians should develop a plan to pay off their debt within a set timeframe.”

Equifax says interest rates will rise eventually and those relying on the availability of cheap credit will be tremendously vulnerable.