Taking a look at debt levels in Canada right now doesn't make nice reading, and it could put the The Bank of Canada in a sticky situation as they can’t get too far ahead of the US Federal Reserve in terms of rate cuts without hammering the loonie and causing another bout of inflation via more expensive imports.

Our biggest problem is that the US consumer is showing no signs of slowing down.

And why would they?  They’ve all locked in low rates for 30 YEARS (something Canadian home owners aren't allowed to do) and their debt burdens overall are much lower than in Canada.

The Fed can’t cut rates until US households cave, and this could mean US consumers hold the future of Canadian interest rtes in their hands, even though our economy may demand it.  Not comforting.