____Posted Tuesday March 14, 2017 ____

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Chart of the Week

Everything's Made in China These Days

by Mike Hayhoe

If you're wondering where all the money to buy Toronto and Vancouver (and now other Canadian cities as well) real estate is coming from, this chart shows you where.

China has dominated the world these past 10 years now in credit creation. Credit creation is just new loans which ultimately is just new money (remember money is just debt) and that money needs to find a home. Some of it is leaking out of China and into real estate around the world, only adding fuel to the real estate fire here in Canada which is already roaring from our own massive growth in credit. At some point, if interest rates ever do go up again, look for this to be a messy unwind. In the meantime, we can all enjoy our rapidly appreciating homes and marvel at the ever appreciating home prices in the GTA.

Mike Hayhoe, BSc, CIM is Branch Manager & Senior Investment Advisor of Canaccord Genuity Wealth Management, Kitchener, ON



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