There once was a central banker who was bored as he sat on the hillside watching the village sheep. To amuse himself he took a great breath and sang out that some property prices were “probably overvalued“.
The Canadians came running out of their homes to try to pay down their debt and get their finances in order. But when they arrived at the top of the hill, they found record low interest rates and rising property prices along with stagnating incomes. The central banker laughed at the sight of their angry faces.
“Don’t cry ‘high debt loads” said the Canadians, “when there’s no interest rate increases!” They went grumbling back down the hill and signed up for some more mortgages.
The banker was replaced with another, but he played the same naughty game, singing out “The elevated level of household debt and stretched valuations in some segments of the housing market remain an important downside risk to the Canadian economy”
By this time though the Canadians were wise to these pranks and they wisely held their place in the line up for the latest greatest condo pre-sales opportunity. The banker retired with a gigantic pension and everyone lived happily ever after.
MORAL: Load up on more consumer debt, invest in hot real estate. What could possibly go wrong?
