benson, yes, increasing interest rates would make things heat up but the chilling reality is worse.
Interest rates are more than likely to drop.
Apart from property and bank profits, low interest rates are doing little to stimulate an uninspiring economy (with a growth rate ~2.5% distorted by the winding up of the resource infrastructure splurge) that is just dragging along. Should the economy sail into reefy shallow water interest rates will drop.
A China slowdown by any degree will create a chain of events here that are really worrying.
Like the resource boom, where we had an economy with several speeds, property is distorting the true picture.
If interest rates were to rise for any reason I'd take it that Glenn and his mob would celebrate.
