Contributing to the impending burst bubble, according to Mansharamani, is rapidly rising household debt that far exceeds GDP, house prices that have continued their upward march, and the falling price of crude oil – all of which will be felt across the country.
The naysayers point out that the impact of oil prices is a regional phenomenon, and that Alberta is not Toronto. But consider that, over the last four years, Alberta was responsible for between 50 and 85 per cent of new jobs created in Canada.
“Without the Alberta employment gains, Canada would have a nine per cent unemployment rate,” said Mansharamani. “It is oil that has helped create that strong economy.”
And many of those workers were “fly-boys,” flown from across the country to work in Alberta. “If there isn’t the work, they’re not going to fly to Alberta,” he added. “If they’re at home, what does that do to the labour markets in each of those local regions? It puts downward pressure on wages, it puts upward pressure on unemployment and it creates a slower consumer spending rate.”
The housing bubble burst is just around the corner, Mansharamani added on his website. “In this Loonie tune, it seems our Crazy Canadian Coyote has run off the cliff, his feet are still moving, but he has yet to look down. He’s suspended in air, and it’s only a matter of time until gravity exerts its force.”