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Mon Jan 21, 2013, 03:48 AM

 

How central banking works - canadian housing bubble popping? central banking = cartel?

Now check out this article in Macleans magazine: “A housing correction—or, possibly, a crash—is no longer coming. It’s here...The sudden cooling in Canada’s housing sector seemingly struck without warning. …. And not just in Toronto and Vancouver..."

The entire article is worth reading, although it’s hard to swallow the whole “no one could have seen this coming” baloney. I mean, how many times have we seen this sort of thing before? Let’s see, there’s the US, the UK, Ireland, Spain, Japan, Australia, and now Canada. That’s a pretty impressive list of coincidences, isn’t it? And isn’t it funny how the exact same policies were put in place (low interest rates and lax lending standards), that produced the exact same results? It’s almost like the folks at the central banks and government wanted to blow up the system from the very start...we’ve seen a rash of these monster bubbles across the industrial world which have ravaged their respective economies and led inevitably to the implementation of harsh austerity measures... Easy-money bubblemaking is just part of a bigger plan to crush labor, eviscerate the safety net, and restructure the economy. There’s nothing random about it...

The fact is, the world’s biggest central banks (The Fed, the ECB, the BOJ, the BOC and the BOE) are a de facto cartel. That’s why they all read from the same script and implement the same policies...Ask yourself this: How could Canadian housing prices double in just a few years, if the bigwigs in the Harper administration and at the Bank of Canada (BOC) weren’t using the exact same blueprint that Bush and Greenspan used? They couldn’t. Interest rates had to be slashed and standards had to be abandoned. That’s how bubbles are created...

Okay, so unemployment is going to soar and GDP is going to shrink. Add that to the fact that Obama is increasing taxes and cutting government spending, (which will slow activity in Canada.) and the chances that Canada will slip back into recession look pretty good. And, of course, the deeper the recession, the more people will face foreclosure, the weaker the demand for housing, the greater the downward pressure on prices, and the bigger the budget deficits. That will give Mr. Harper and his party of far-right loonies the opportunity to push for savage cuts to popular social programs while launching a full-blown attack on the labor unions... Of course, it’s all just a coincidence, because to suggest otherwise would be positively conspiratorial, right?

If you want to know why Canada’s housing market is headed for the shitter, look no further than Bank of Canada chief Mark Carney, the man who kept interest rates locked at 1 percent for 4 years despite the fact that Canadians’ debt-to-income levels have gone through the roof (higher than Americans at the peak of the housing bubble) and despite the fact that housing prices have more than doubled in less than a decade. Carney has kept the punch bowl brimming throughout his tenure at the BOC, which is why he’s been pegged to take over the top job at the Bank of England (BOE) next year. It’s because destroying Canada’s economy is an achievement that deserves to be rewarded. That’s how central banking works.

http://www.counterpunch.org/2013/01/17/how-central-banking-works/

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Reply How central banking works - canadian housing bubble popping? central banking = cartel? (Original post)
HiPointDem Jan 2013 OP
HiPointDem Jan 2013 #1
dukiev Feb 2013 #2

Response to HiPointDem (Original post)

Tue Jan 22, 2013, 02:01 AM

1. kr

 

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Response to HiPointDem (Original post)

Mon Feb 11, 2013, 04:48 PM

2. Canada's housing went up even more in US currency

more over if you look at the percentage growth of canadian real estate in US dollars it is way more than doubled. For instance Canadian homes went up by more than 180% in US currency. Source: http://www.torontocondobubble.com/2013/02/toronto-housing-prices-in-us-dollars.html
There is no way this is going to end well!

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