Since the goofs at the Bank of Canada lowered the key rate a weensy quarter point in January, the dollar has lost more than 5% of its value. More clobbering on Friday, as it shed another half-cent, and now sits at a quarter above 78 cents US.

Canada imports $524 billion worth of stuff a year, $106 billion of that in consumer goods. The bulk is priced in US dollars. So we’ve only started to see upward pressure on little things we use every day. Like food.

We export $475 billion in goods, of which the biggest component (28%) is oil, at $128 billion. Oil’s tanked more, finishing the week at just under $45 a barrel. Since the price of the stuff we sell has plunged, and the stuff we buy costs more, Canada’s running a big, fat trade deficit.

Now, jobs. The unemployment rate has gone up again. We’ve recently lost 26,000 jobs in the resource sector, 14,000 of them in Alberta. Significant losses in Saskatchewan and Newfoundland, as well. That’s understandable given the collapse in crude values. In fact, most economists say the real storm is yet to come, so we should expect crappy employment stats for months.

But we also lost 19,000 factory jobs last month, the most in four years, largely in Ontario. That’s a surprise, given the fact the decimated loonie was supposed to make our manufactured exports more competitive. You should also know three things about our labour market. First, the fastest-growing category is self-employment. That’s what happens when you lose your salaried position. Second, the youth unemployment rate is shocking, at almost 13.5%. Third, last month governments hired another 24,300 people. Without that bloating of the public service, our job loss would have far exceeded the net 1,000 reported.

Now, go back and read yesterday’s post. Remember the key points?

That’s right. BC’s financial regulator has been warned a housing crash in that province could lead to massive mortgage defaults and blow up the credit unions. House prices and sales are now stagnating, or declining, in 80% of Canada’s markets, despite the fact we have the lowest mortgage rates in recorded history. And, we’ve just hit a new record for debt obesity. Borrowing spurted higher this winter, concurrent with oil dropping and jobs thinning.

Oh yeah, subprime lending is now the fastest-growing segment of the mortgage industry. The number of uninsured home loans has been exploding as average prices in YVR and the GTA top a million and buyers resort to borrowing the downpayment. And the IMF once again pleaded with Ottawa to seriously regulate the whole housing scene, saying properties cost too much and Canadians earn too little.

It sure looks like the perfect storm for real estate. But will most people just ignore the risk, borrow their brains out and be motivated by their house lust?

That’s a rhetorical flourish. Of course they will. And you can be sure no political leader will have the stones to caution them, pointing out that when debt rises but incomes don’t it’s a sure bet families are living beyond their means.

CIBC egghead Avery Shenfeld looked at the jobs numbers Friday and said they are only “the early stages of the headwinds to the economy from weaker oil prices.” But it’s not just oil. The number of people now employed manufacturing stuff is the second-lowest on record. And our unemployed youth (up to age 24) are the best-educated yet among the most under-employed in history.

The doofuses who come to this blog to argue immigrants are to blame for houses they cannot afford, when it’s the crack cocaine of cheap money and the daring greed of lenders that’s kept prices rising, need to stand back and reassess. The vast majority of real estate changing hands in Canada is between Canadians who are willing to immerse themselves in debt to do so. We do this despite the obvious fissures in our economy, blind to the risk we’re taking. Over 70% of us own houses now, but an equal number have no pensions. The savings rate is tumbling and half of us couldn’t go a month without a paycheque.

Worse, we’re using the cheapest rates we’ll ever see to take on more debt, rather than trashing the steaming piles of it we already have.

The anti-immigrant, anti-Chinese meme that bubbles up here every day is even more pathetic than the blog itself. We could bolt the doors tomorrow, trash our rep as a generous people and take the economic hit, but it wouldn’t drop prices in Van or 416. Because foreign buyers did not cause them.

You did. Now it’s time to prepare for the consequences.

We’ll start Sunday.