Because another recession may be coming soon to an economy near you.
That’s right.
“Despite some signs of recovery this spring, the US - with 9.5% unemployment - has made up few of the 8 million jobs it lost in the last recession, despite massive government spending to stimulate the economy.” (Aug. 14, ‘Double Recession Double Trouble,’ London Free Press)
Why should (as I said yesterday) North Americans reduce spending, pay down debt and save money - including Canadians, who seem to be recovering well from the last recession?
["Roller coasters stay on tracks, our economy doesn't"]
For a few reasons.
In the US, the following bad signs are evident:
Home foreclosures are reaching record highs again
Jobless claims are rising
Core retail sales are falling
In Canada, the following is still true:
The Canadian economy is strongly reliant on the US economy
E.g., Ontario is 80% reliant, Quebec 75%, BC 58%, Alberta 57%
Also, some of the factors that powered growth in the Canadian economy recently are disappearing.
E.g., Government stimulus spending will dry up
Manufacturers will come to the end of inventory building
Housing markets will cool
If that isn’t enough to wither your wick, the only hope suggested by economists right now for Canadians is the US government. If it will provide more stimulus spending to suffering industries then Canada’s economy might do all right.
Let's all hold our breath.
I think a hard rain’s a-gonna fall. (Insert Bob Dylan CD here).
***
I’ll work hard to add another $10 to my mayo jar this week.
That will make $100 so far.
Are you putting away a little extra?
.
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