Great Graphic: Household Debt in Canada--Carney's Legacy?

We get it. According to the UK Tory-led government the best person in the world to head up the Bank of England is Canada's central bank governor Carney. He takes the reins the beginning of next month. We have suggested he is leaving Canada not a moment too early.

Much of Canada's economic and financial success owes little to Carney. The positive terms of trade shock, by which commodity prices soared (especially relative to manufactured goods prices)appears to have ended. 

The fact that Canadian banks avoided the worst of the sub-prime mortgage woes of its southern neighbor and the sub-prime sovereign woes of Europe had little to do with Carney and much to do with the conservative regime he inherited.

One of the imbalances Carney's successor will inherit is the growing household indebtedness relative to disposable income.  We have previously shown versions of this Great Graphic.  This one was posted by Sober Look and comes from Barclays Research.  The divergence between the US and Canada depicted here is continuing to grow.  Simply put, Canada is increasing financing domestic consumption via debt.  It need to grow rapidly or debt servicing will be increasingly difficult.  The 95k rise in May jobs, the strongest in a decade, is helpful, but it is not sustainable.  Slow growth or rising interest rates (debt servicing costs) can be the trigger to end this cycle. 

If it can be summarized in one word, perhaps it is "vulnerable".