Duckster, many thanks for your time and thoughts.

Duckster, interesting insight on what might happen to the property market if interest rate rises.

Pondering on the articles below ….  could there be the 'hypothetical' scenario of inflation (results from creating/printing more money + borrow more money via international funds and Government bonds) – a situation like Zimbabwe.  However, the economy confidence is still low through a prolong bearish market.

Arcticle
"<A website> going to comment on this astonishing fiscal irresponsibility of Congress and the Federal Reserve, but instead they commented on the $787 billion, 1,074 page stimulus bill that was just signed by Obama by noting, "The current 'stimulus' package of $787 billion is more than the entire National Debt in 1978 ($771 billion)."  The same situation happens to us in Australia, where we are in deficit after year of +ve figures; we many pump in more $$$$$$$.

If Australia stimulus package(acts like a cough syrup) does not cure the sickness, then the cough would return and permeates through the market confidence.  When it's bad enough, then insuers/financial institute/car manufacturers would 'wave' the white flag and seek for Government bailout… Government has to seek or 'make' more $$$$ via the many creative financial ways. Otherwise, it would affect (1) Financial liquidity (2) Ability to renew short/medium term loans by major companies (3) jobs (4) welfare of the society – health and crime … to name a few that i know.

As you mentioned, if inflation goes up, the Government would increase interest rate – hence, it would be a negative cash flow investment.  On the other hand, during the period of inflation the cost of material to build a house would also increase.  This means there will be capital grow … with a caveat – if there is still demand for houses to rent or own (this is a debate I had with a friend but towards no conclusion   ).

Thoughts or comments?

cheers
hingko24