Did You Fib On Your Mortgage Application? There May Be Trouble Ahead – July 24, 2018,
An interesting read about the upcoming economic crash in Canada I don’t think this article went far enough however it’s still a pretty good read. Click the link below for more:
https://www.huffingtonpost.ca/2018/07/21/mortgage-fraud-cmhc-cra_a_23486793/ – Did You Fib On Your Mortgage Application? There May Be Trouble Ahead
Well, my views are very similar to the views on this article except that I’m of the belief that Canadians are too prideful to default on their mortgages in mass. What I do think will happen are the real estate investors will get exposed, the flippers, the real estate investors whose cash flow is already of whack right now. I personally know if several real estate investors whose tenants pay them less rent than their mortgage costs. These individuals justify this loss by reminding themselves that the price of their investment property will rise, or if they have several properties they’ll use the properties that are positive cash flowing to pay for the properties that don’t cash flow.
This is where things get complicated when interest rates start rising rapidly, one of the reasons Canada is evolving into a real estate hell is that based on the Canadian governments economic housing manifestation, prices can’t come down which means wages have to go up if wages go up manufacturing jobs will disappear or at the very least become less competitive. Which obviously means tariffs on foreign-made goods will go up. Already in Canada, there is a lot of stuff that isn’t imported into Canada because of Canada’s high barrier to entry, this contributes to inflation because Canadians have fewer options.
I’m not entirely sure of Trumps long-term plans but the U.S is a pretty competitive market primarily because there are Liberal and Democratically run states. In the U.S their third most popular political party is often the Libertarian party, which serves as an indicator of how much of a force the political Right is. In Canada on the other hand, there exists no Ron or Rand Paul in our media. We don’t have the equivalent to a Fox News in Canada, all of our news stations are Canadian government friendly. Being that even the Conservative Party of Canada is in many ways nothing more than a political party conserving Liberal parties, every single time a Liberal takes office Canada leans further Left.
What this inherently means for our future if there aren’t any changes done to our economic system soon Canada is going to be the next Japan. I’ve written about 100-year Amortizations coming to Canada plenty of times, I’m of the belief that the Canadian economy can’t deflate without collapsing because we have so many regulations. One of the reasons under NAFTA why American made goods get hit with massive tariffs revolve around hefty Canadian regulations.
It always makes me laugh when I read about Canadians who say, we’ll simply exchange American made goods for goods that come from other countries, what these people fail to realize is that Canada doesn’t have any free trade deals with other countries and one of the reasons for this is because of hefty regulations. Bartering means giving and taking. Well if you look at most of the regulations in Canada, the creators made sure that in every transaction Canada will get the better end of the deal, which ultimately leads to other countries not wanting to do free trade deals with us.
NAFTA was supposed to be harmonious, it hasn’t worked out that way and for the first time since it’s creation, there’s a political leader trying to make changes to it. I keep saying Trudeau ran a deficit, which would have been okay if maybe Hilary Clinton was President, but the current man in the white house is looking out for America’s best interests. In months and years past the Canadian news revolved around a real estate bubble, now it’s a small story. Almost as if Canadians thought that problem went away. Trump derangement sydrome is in full effect in Canada let’s hope the Canadian government has everything under control.
Interesting times ahead.