Time to delve into a topic I enjoy most: the end of the world economy.
Okay, I jest a little. I’m not suggesting it will necessarily be the end of the good life as we know it. But our society is so focused on the present that we often lose sight of some troubling spots on the horizon.
So if you enjoy a good doomsday report, please, read on!
1. The debt bomb. Canadians now have the highest debt relative to income ever, at 150%. We even beat out the debt-loving Americans. Bank of Canada governor Mark Carney has repeatedly warned that Canadians are taking on too much debt. And he has credibility. He’s now chairman of the global Financial Stability Board, the entity in charge of preventing economic collapse worldwide. Plus he’s one cool dude (seriously, have we ever had a cooler governor?)
Housing prices in Canada have reached a new peak. Just a few years ago $200,000 could buy you a mansion in Saskatchewan – now it buys you an 800 square foot bungalow. Many fear what a 2-3% increase in interest rates would do to home owners.
Government debt is another hot topic that’s currently wreaking havoc on Europe. A full-scale collapse of the Euro and/or a market crash could result in the next year. How long before the same situation faces the United States? They know they can’t keep borrowing forever, yet they refuse to increase taxes or confront an issue that will keep getting bigger…
2. Health care. All industrialized countries, whether offering private or public care, will face a huge task of addressing health care costs in the next 10-30 years. As baby boomers retire, their frail, aging bodies will need drugs, therapies and maybe even bionic limbs (hey, you never know!) This will come with significant costs, but this unfunded liability is rarely acknowledged by governments today.
3. Environment. The problem with climate change is that its affects are projected so far into the future that we have trouble addressing them today. While I think reducing emissions worldwide is nearly impossible, we should be investing much more into research and technologies to mitigate the effects of climate change.
Another frightening issue that gets much less attention is the health of our oceans. Over-fishing, chemical pollution and warmer water temperatures are having a devastating effect on earth’s largest ecosystem. I’m no expert on what this all means, but we’ve seen the effects of a failed fishery on Canada’s east coast. This kind of economic/environmental collapse is playing itself out across the globe.
4. The end of oil. This will probably have the biggest impact on our day to day lives over the next half century. We won’t see the end of oil in our lifetimes, but we’ll see the end of cheap oil. Despite all our advances in technology, we still have no one solution to solve our energy problems.
Perhaps there will be a seamless transition from our oil-dependent ways to other alternatives. More than likely, we’ll have to live with less as we trade in our SUVs for hatchbacks, and hopefully not horses (although my dad wouldn't mind). As economist Jeff Rubin has noted, it was high oil prices in 2008 that precipitated the global recession and high oil prices that will continue to hinder a recovery. With a lack of cheap energy, anemic economic growth may become the norm.
Those are my doomsday predictions and I’m sticking to them!
Please don’t let it ruin your day.
No comments:
Post a Comment