Prime Minister Pierre Elliot Trudeau once said that 'People who live at the foot of great mountains are often the last to climb them.'
A succinct analogy about introspective navel gazing that aptly defines Vancouver.
The latest external observer who can see what so many here cannot is Paul Krugman of the New York Times.
Now... I am not a Krugman fan. One of the media's chief promoters of the Keynesian policies driving the Federal Reserve, I have disagreed with a great many of Krugman's columns. But even Krugman appears to be recognizing what got us into the current worldwide financial mess.
Yesterday, Krugman wrote:
- "My take on the US economic crisis has increasingly been that banks were less central than many people think, while the housing bubble and household debt are the key players."
As Krugman comes to grips with this reality he opines that this is why financial stabilization by itself wasn’t enough to produce a V-shaped recovery.
We won't go into the massive amount of debt deleveraging that must occur to rebalance the economy. What stands out is Krugman's next comment.
Looking northward, across the border, Krugman weighs the combination of Canada's ever growing housing bubble with it's ballooning household debt and opines:
- "If I take all that seriously, I should be very worried about Canada."
Those of us who aren't overdosing on the Maple Syrup Kool-Aid are too, Paul.
With each passing month, more and more Vancouverites are convinced we are immune from a real estate-led economic downturn.
Too many people refuse to recognize/acknowledge that emergency level interest rates is the only thing that stands between many families and financial disaster, especially here in Vancouver.
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