Adios Mark Carney...

The last Bank of Canada rate decision of the Carney regime comes out this morning.

Expect no change at all.

The punishment of savers and encouragement of wanton borrowing, aided and abetted by the banks (You are Richer than You think!) has led to this (thanks Ben Rabidoux)

This graph is up to 2011. The divergence has just got larger since then. It sure looks like a large edifice of debt sitting on small and wobbly legs of income.

The problem is that when it starts contracting, it is self-perpetuating. The domestic 'boom' has been built on debt and when the debt hits it's inevitable ceiling and consumers pull back, there will be weakness and job losses and more debt reduction and so on...

This is the legacy of Mr Carney. Not that I am out to demean the guy, he did what he thought was right at the time. 'reduce rates and jaw-bone consumers'. 

Unfortunately it didn't work, we are at the edge of the precipice IMO.

I wish him well in the UK , though I am not sure how our situation resolves gently without a huge up-lift in exports.