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A street scene in Amsterdam, Sept. 11, 2011. Belying their frugal national stereotype, the Dutch are actually the euro-zone champs when it comes to personal – as opposed to government – loans, and the Irish are just a step behind, according to a report by Martin Schwerdtfeger, senior economist at TD Economics.

Peter Power/The Globe and Mail/Peter Power/The Globe and Mail

Let's not go Dutch

Those spendthrift Europeans! No wonder they've run into trouble. It's time to crack down on the free-spending ways of the … Dutch?

Yep, it's Northern, not Southern, Europe that leads the continent at running up household debt. Belying their frugal national stereotype, Dutch are actually the euro-zone champs when it comes to personal – as opposed to government – loans, and the Irish are just a step behind, according to a report by Martin Schwerdtfeger, senior economist at TD Economics

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His report underlines something that often gets overlooked: the lack of any relationship between personal frugality and government frugality.

People who would never dream of abusing their personal credit cards sometimes elect budget-busting governments. Italians are a case in point. Despite their government's well-publicized debt problems, Italians are the least indebted of any euro-zone citizens.

In all the furor over the euro zone's quagmire, household debt levels have come in for little examination. But Mr. Schwerdtfeger believes they could be key factors in determining which countries bounce back quickly. Overstretched households are likely to drag down growth in several countries, he writes. In contrast, "Italy's stronger private balance sheets put it in a better position to withstand the fiscal tightening efforts that lie ahead."

The greater fuel theory

Soaring stock markets leave no doubt that someone is pouring cash into the stock market. But who?

Pierre Lapointe of Brockhouse Cooper, the Montreal brokerage, examined the suspects in a recent report. He notes that surveys of individual investors demonstrate growing optimism about stocks. However, there's no evidence that Mr. and Mrs. Average are stampeding into the market. Just the opposite. Over the past six months, retail investors pulled $23.5-billion (U.S.) out of U.S. equity funds.

Pension funds and hedge funds seem similarly skeptical about this market surge. Mr. Lapointe shows that contracts on S&P 500 futures held by speculators are roughly balanced between long and short positions. This is not what you would expect if the pros were confident that the benchmark index was heading higher.

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So where is the fuel for the rally coming from? Mr. Lapointe says it's most likely from mutual funds dipping into their cash reservoirs. The proportion of "liquid assets" – read cash – held by funds dipped from 4.2 per cent of their assets last April to 2.6 per cent in January.

"Based on what we can see in terms of flow of funds, it looks that the recent rally was fuelled in part by a reallocation of cash assets to equities," Mr. Lapointe writes. "The problem is that cash assets in mutual funds are now near a 22-year low." That suggests the market will have to find a new source of fuel to climb higher.

Gold takes a back seat

Forget gold , diamonds, copper and nickel. Canada's most-precious mineral resource is potash.

The country produced $7.97-billion of the key fertilizer ingredient last year, according to Natural Resources Canada. That's almost five times more than in 2000, the fastest pace of increase among all the minerals shown in our chart.

More people in the world, earning more money and eating more food, have driven up fertilizer prices. Potash Corporation of Saskatchewan Inc., the world's biggest producer of the mineral, has benefitted from those trends, and so have the company's shareholders: The stock price has risen by 1,000 per cent this millennium.

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"If you go back to 1970 through 2010, global crop consumption has increased by 2.5 times, while global population has ... doubled, and per capita income has increased by 30 per cent," David Delaney, the Saskatoon-based company's chief operating officer, told an investor conference last week. "Demand ... is putting tremendous pressure on the supplies around the world."

And which mineral had the highest production value in Canada at the end of last millennium? It was gold, followed by ... potash.

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