Central bank warns on rising debt

Canada's central bank has warned that the biggest risk to the country's financial system is the increasing amount of debt.

Hmmm, what can be causing the amount of debt to increase?? Maybe people have just become more greedy or irrational lately?? Or maybe more people believe the world is going to end soon, so they want to live it up in a big house with a new car before it's too late?

Or maybe it's because of this insane policy we have that is keeping interest rates at near zero.

This is really hypocracy at its worst. It's like punishing the kids for getting drunk when you spiked the punch bowl.

The bank did an excersize where it raised the interest rate to 3.2 and 4.5 from its current .25%. What does that translate to? Hmm, if you raise interest rates by 3 percent, that will translate into about a $700 incraese for the average family per month. If you raise it by 4%, that translates into about a $900 increase (assuming an average mortgage rate of 400K and a 35 year amort rate). How many people do you know who can afford such an increase?

This is negligence pure and simple. Why is it that the Bank of Australia is raising itnerest rates, while Canada is doing nothing? Because Australia's housing market already crashed. The BOC is desperately trying to keep Canada's housing bubble inflated. But as the rest of the world has already seen, this isn't possible.

If the BOC were a private entity, I believe you'd have a good case against them for fraud.