End of the Boom Part 2

Today the Alberta Unemployment rate was released. It was 3.6%. While that seems low, it's interesting to note that Edmonton & Victoria have lower unemployment rates and Vancouver is 0.1% higher than Calgary.

This seemed to be missed by the media. I can't recall the numbers but I recall the city of Calgary having a rate of 2.6% a while back, so 3.6 is a rather large increase in percentiles. If the rate was to rise this fast elsewhere, people would be all over it.

The Stelmach government has stated several times that they expect lower tax revenues from Gas and Oil in the coming years. 30% lower overall, meaning profits in oil and gas will fall. One reason is that costs of extraction have risen 250%, so 60 dollar a barrel oil is no longer money in the pocket. Not to mention the tar sands are energy intensive. It takes a great amount of energy to extract the energy in the tar sands (same as ethanol).

I've heard several analysts on the radio talking about how things may go bust here in 5 years, and how the government of Alberta has (again) not planned for the future. You'd think after 80 years of boom and bust they'd use some of that money they rake in to create a diverse economy that doesn't rely for 70% of it's government revenue on Natural gas & oil (FYI, Natural Gas is 66% of the governments revenue).

To quote the Edmonton Journal, the boom may over. But no one seems to know it. And while I doubt that it will be a "bust" like it was in 1981, I have to wonder what will happen. What with all these 20 year old buying 350K condos with 0% down? What about the rampant, almost piggish spending out here? When you see a guy try to pay for a coffee with AMEX cause he has no "money" in his pocket, you start to wonder where it's all going.