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Originally Posted by Sylvanfan
Yeah, but thats not just all related to housing. How many people are driving around in new cars, or going to all inclusive resorts on vacation two times year, smoke or drink regulary, or wear ultra fancy clothes, and other stuff like that? IMO a place to live is a neccessity, you can't get by without one, or at least not very comfortably. All that other stuff....that can be cut out of your life for cheaper alternatives.
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Of course it's not all related to housing. The fact that credit is easy to get these days and people are spending more than what they are bringing in. Loans for a new car, home improvments, vacations etc. I worked with a lot of people like this. Their biggest fear was losing their job and wondering how they would continue to make the payments.
Here's some interesting stats.....
Canadian Personal Debt Concerns Paralleling America's
http://www.associatedcontent.com/art...ralleling.html
Again mirroring the situation of its southern neighbor, Canada's average mortgage rate has shot up, going from 6% to 7.24% in the last 12 months. Some Canadians are finding themselves in over their heads with their mortgage load and other debts.
Canadian personal debt is up 27% from what it was in 2003.
"If rates continue to rise to offset inflation those consumers servicing a heavy debt load could be caught short. It is a double edged sword. Inflation means higher costs for goods and services which can place a strain on the average household income. Higher interest rates are needed to slow this inflation and that can place pressure on consumers if they are not in a strong financial position to pay the increased costs of borrowing," Scott Hannah, President of Canada's Credit Counselling Society, said in the press release.
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Besides this country has a lot more people over the age of 35 than under. Most people over that age are fine. I'm guessing during the 70's when the first wave of baby boomers starting coming online and hitting their purchasing years and forcing interest rates up and up until the early 80's everyone was saying the same thing. Sure there were some rough patches, but the difference was that generation didn't have enough people above them to lend them money. Today the echo generation will eventually survive as their parents are generally wealthy and will be passing their wealth down to their children eventually.
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I lived through the bust of the 80's and watched friends of mine lose everything. They had their own house and rental properties all with large mortgages. Doing much the same thing people are doing today. Riding the crest of the boom thinking everything is going to be okay. The bust comes and suddenly they have mortgages worth more than what the house is valued at. People handed their keys to the bank and walked away from their homes. I doubt will have another bust like we had in the 80's. Then again no one saw the bust of the 80's coming either.
True the echo generation will survive.