By Colin Campbell - Tuesday, November 27, 2012 - 0 Comments
A monthly scorecard on the state of the economy in North America and beyond
Markets are sinking; foreclosures are rising; and the fiscal cliff is looming. The United States is in pretty rough shape again. Right on cue, the Occupy Wall Street movement is back, with a new campaign launched last week called Rolling Jubilee. Described as “a bailout of the people by the people” it buys up distressed household debt (like credit card debt) that’s normally sold by lenders to collection agencies for a fraction of its original value. Rather than try to collect on it, Rolling Jubilee forgives the debt. As of last week, it had raised $285,000 in donations, enough to buy $5.7-million worth of defaulted loans.
Rolling Jubilee has received almost unanimously positive attention (even Forbes praised the idea). It uses private donations, and the way the distressed debt is sold means those lucky enough to have their debts forgiven are chosen at random. More importantly, it’s a creative, free-market response to what is still a serious problem dogging America’s economy, and one that could soon blow the bottom out of Canada’s.
Last week, a Bank of Canada official warned yet again that household indebtedness is the biggest risk facing the economy—bigger than a U.S. recession, Europe’s debt crisis or falling demand for commodities. Interest rates aren’t going anywhere (except maybe down), either, so indebtedness is only going to keep growing. (It’s fair to say the central bank’s debt warnings over the years have been useless, and now border on disingenuous). Continue…