Is Canadians’ soaring debt too high

OTTAWA With a popular measure that shows Canadians soaring debt remains in record breaking territory, the federal government has acknowledged internally there no way of knowing whether the burden has climbed too Replica Bags high.A recently released federal analysis, prepared for Finance Minister KnockOff Handbags Bill Morneau, said the country household debt to disposable income ratio has been steadily rising since Designer Replica Bags 1990, when it was 90 per cent. That translates to 90 aaa replica designer handbags cents in debt replica Purse for every dollar of household disposable income.On Thursday, the latest figures showed the ratio hit 170.4 per cent in the final three months of 2017, just below its Wholesale Replica Bags historical peak of 170. 5 per cent the previous quarter. That just over $1.70 in debt for every dollar of disposable income.Three real life signs that interest rate purse replica handbags hikes are Replica Handbags already starting to biteCanadian consumer debt hits new high amid watchdog warningsHousehold debt to income ratio edges lower: Canadians now owe $1.70 for every $1 earned the debt ratio is high historically speaking, there is no way of precisely determining whether the current ratio is too high, said the replica handbags online memo, which was Fake Designer Bags written last August.is no estimate of the exact level of household debt. Finance Department document, labelled was obtained by The Canadian Press under the Access to Information Act.Policy makers keep an eye on the debt ratio, which is one of several ways experts monitor household debt, in their efforts to gauge the severity and potential fallout of the country years long borrowing binge.The Bank of Canada, for one, has carefully assessed the economic risks of consumer debt in order to determine how quickly it Replica Designer Handbags can raise interest rates without piling replica handbags china on too many debt servicing costs for over stretched households. The central bank has called Canadians debt burdens an area of top concern.Still, in response to the stronger national economy, the bank has increased its benchmark rate three times since last summer. When the economy is close to full capacity, the bank hikes its rate to keep inflation from rising above its two per cent ideal target.Even if it is uncertain where the danger zones begin for the household debt ratio, the briefing note to Morneau said there are negative consequences for the economy if the number gets too high or too low.High household debt can lead to and more protracted recessions, while Fake Handbags levels too Designer Fake Bags low among those who can afford it could push home ownership rates down to sub optimal levels, the memo said.But the document notes that static calculations about debt fail to account for many other factors that can affect the entire picture, such as policy changes aimed at slowing debt accumulation.what drives the sustainability of debt is whether carrying it is affordable and whether the distribution of that debt poses any systemic financial risk, said the memo, which was partially redacted.The main theme of the document was to explore likely economic impacts from the Bank of Canada current rate hiking path.The memo presented Handbags Replica two primary ways higher rates will affect the economy they will make existing debt loads costlier to service wholesale replica designer handbags and they will make interest sensitive spending, like expenditures for cars, housing and business investment, more expensive.But given expectations the central bank will take a gradual approach to raising the rate, the briefing note said the high quality replica handbags economy is likely to steadily absorb the increases.Some analysts said the fact this week debt ratio reading was slightly lower Replica Bags Wholesale than the previous number could suggest Canada debt growth may have turned a corner.should be viewed as a positive development cheap replica handbags replica bags by the (Bank of Canada), though progress on reducing the vulnerability of elevated household debt will likely be very slow, RBC economist Josh Nye wrote in a research note.For several years, policy makers have been introducing new regulations, such as restrictions on https://www.ermobags.com mortgage credit, to curb the build up of household debt.

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