"Normal Debt Levels"

One way to view the crisis is as deleveraging of everything. Essentially, that means a reduction in debt down to historical norms. Interestingly, historical norms put sustainable levels of debt at about ~160 percent of GDP. We are currently at 370%. To get down to historical levels, we need to destroy -- pay-off, write off, or reduce -- upwards of $30 Trillion in debt (and that is in the US alone).

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The recent past has underscored the fact that, in finance and the economy, most things are
interconnected on a global scale. Throughout its history, Canada has been powerfully
affected by events elsewhere. Manitobans in particular are well aware of this reality. Waves
of immigration, rapid changes in commodity prices, the Great Depression, two World Wars,
and technological advances – all have had an enormous impact here. More recently, the
global financial crisis has been a stark reminder that everyone – even citizens in countries
with sound “fundamentals” – is affected by major shocks, regardless of where those shocks
originate.
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