“Anyone who sits and looks at what happened and says, ‘Well, that wasn’t a Great Recession,’ hasn’t appreciated the scale of what was done to ensure an outcome that wasn’t as extreme as before, particularly on the fiscal side. Anyone who doesn’t appreciate the gravity of the last couple of years hasn’t thought through or appreciated the scale of what will be required to adjust fiscal back to normal.”

Those were the words of wisdom uttered by Bank of Canada’s chief Mark Carney, who was warning against thinking than a faster than expected recovery is a sign that the financial crisis wasn’t so serious, after all.

Nothing further from reality. The global economic system is still being held in place for the most part by huge amounts of government disbursement. The rising debt, both in public sectors and private households, as consumers in countries like Canada capitalized  extremely low interest rates to borrow the unborrowable, is changing the rules of the economic game.

Canadian businesses must plan ahead their operations in this new global economy, Mr. Carney said.

“We have to look at that and think of how to rebalance our own economic activity.” Businesses have to “decide whether the only impulse, or the principle impulse, that we want to take from the fastest-growing part of the world is just on the price side, through terms of trade on commodities; or do we want to do so on the volume demand side by selling a wider suit of services and goods to those parts of the world?”.

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Tags: businesses, global, Great Recession, Mark Carney