Funding costs have been going up in the US since August, and...

Funding costs have been going up in the US since August, and thats even though they have announced QE2. The Fed money printing is only having an effect on short term rates - which australian banks have been continuing to roll over at those lower rates - however the FED has minimal control over long term rates. By borrowing from overseas where rates are low, you also expose yourself to currency risk if you are borrowing in that currency. In addition, when the banks go overseas to source funds, the overseas lenders are becoming more and more cautious on Australias private debt binge. They are telling the banks, 'your country is starting to look like a debt junkie, if i am going to lend you money, i want a higher return to offset my risk to your addiction'. So the banks are effectively having to pay more. The more our debt grows to GDP, the more expensive additional debt is going to become, regardless of whether it is public or private - something the gov and the public fail to realise. Our public debt may not concern many, but our private debt is huge.