B
burt-oh-my!
Debt and markets: in the 90's, the Canadian federal debt was 563 billion, and over 100% of GDP, 2nd highest in the OECD after Italy. Since then (using 1997 as a starting pint, when the federal debt peaked), the debt has come down to under 50% of GDP, and the Canadian market has approximately doubled, probably a bit more when you add dividends. That return was therefore probably somewhere around 5.5 - 5.5% per year. That is STARTING from a high debt point. Japan over the same time period went from average debt levels to extremely high debt levels, and their market tanked.
I am NOT asserting causality here, nor am I looking at a myriad of other factors: other kinds of debt (personal, corporate, provincial, municipal etc), econonic growth rates, demographics etc. AllI am saying is that right now hysteria over debt is the boogeyman du jour, but the relationship is anything but proven.
I am NOT asserting causality here, nor am I looking at a myriad of other factors: other kinds of debt (personal, corporate, provincial, municipal etc), econonic growth rates, demographics etc. AllI am saying is that right now hysteria over debt is the boogeyman du jour, but the relationship is anything but proven.