At least in America I think the complete opposit is what is most often going on, namely the recovery of the market is contrived when in reality it isn't.  So people spend more, spend more of what? Their savings or credit? Comes to a point eventually when these people can no longer service their debts and the poo poo hits the fans.

Well in that case, it makes your comments that much more palatable as you are practising what you preach so to speak.  I appologise as well for getting a little too excited with my views.

Choices? Come on, its not all about one’s choices but one’s opportunities and environment in which choices can be made.

Have a look at the following article regarding energy costs, noting the word ‘forced’ in the first paragraph. There is very limited choice in the energy market.

http://www.dailytelegraph.com.au/money/money-matters/big-end-of-town-dodges-power-struggle-over-electricity-prices/story-fn300aev-1225852928389

I chose to move from Sydney to Canberra two years ago to work in the PS. I bought a very modest, older style unit and to be honest, the interest rate increases are hurting. I did have some money owing on my car that I incorporated into my mortgage at a lower interest rate, but still, the entire mortgage after FHOG, fees etc is a pretty modest 282k. I was approved on 51k salary and currently on a 61k salary. I previously rented and that too was not easy because I was paying off a car at the time as well.

Fortunately I have folks that don’t mind helping me, not with the mortgage, but with other bills and such – they have done pretty well for themselves so they do not mind at all. I don’t like it, but I just cannot afford to pay everything (eg body corp fees alone are over 600 per quarter). I don’t have the energy to take on a second job. I seldom buy new clothes and never go on holidays or other activities, and you won’t find me splurging down at Harvey Norman on the weekend or going on other shopping sprees, but I do eat well, eat out once a week and go to the gym – lifestyle choice that admittedly does come at a slight increased cost than feeding on diet of sh*t-for-food and becoming a fat, hideously overweight marshmallow as many of my colleagues are.

Sonyasai you imply that everyone who is crying foul about interest rate increases have splurged on 700k loans and that is certainly not true for everyone.

I sincerely hope all property investors out there pass the costs on to renters. If interest rate rises are meant to curb spending, then placing that burden upon mortgage holders alone is bloody incompetent imo. How about raising the GST? Would be political suicide for sure, but would probably be much more effective spending deterrent.

I know at least NSW is faced with ever increasing energy costs and this combined with increased interest rates is got to have some kind of major impact.

For the life of me, I cannot see how so many people can go down the local shopping market every weekend to places such as Harvey Norman and the like, and spend like there is no tomorrow (probably a lot of it is personal debt accumulation granted). If people weren't spending there would be much less economic activity and less pressure on interest rates. 

Have a look at the following article that appeared in The Daily Telegraph. I would like to know peoples' opinions on this….

http://www.dailytelegraph.com.au/news/sunday-telegraph/interest-rates-headed-for-10/story-e6frewt0-1225852217807

There has to be a bubble burst again somewhere down the track. Wasn't it the RBA that failed to forecast the effects of the GFC and keep rising interest rates, to only respond with almost childish panic to bring them back down again to record lows? Probably too low in the first place. All seems to be over-reacting by both the RBA and Government to the economic vicissitudes the way I see it.

That's an interesting anecdote there from sonyasal. One thing I've noticed here is the number of young people starting early and making a success of it – I wish I had half your wisdom at your age. I'm 39 and just bought my first and only property and its my PPOR. In retrospect I  went down a path that was clearly marked 'wrong way go back'. That path was what was preached to me – get an education and get a job, don't invest or take risks.  Ironically the safe route was the biggest gamble and risk I took,  one that has unfortunately led to years of mediocrity.  

I feel some ambivalence toward the issue of money – interesting topic though. On the one hand, people shouldn't use their love for money (as per your bibilical quote) to disadvantage someone else. This kind of activity can take on a number of forms from selling via manipulating people, especially vulnerable people, into purchasing meaningless or expensive products, or outright ripping someone off by way of exploiting someone's ignorance.

On the other hand I think it's important to have enough money so as not to burden society or other people unnecessarily. It is little benefit to anyone if you give all your money away to someone, charity included, if you are left with not enough to live and then have to depend on someone else.  

One thing I have commonly noticed is that those who preach 'money doesn't matter' soon change their tune when they don't have enough of it themselves. Money certainly does matter when you suddenly lack it.

I use to attend churches that were big on money collection and the hypocrisy was so annoying that I couldn't bring myself to continue attending. Often it was preached to trust God with your finances all the while holding out their hand for you to part with your hard earned, even if it left you without, freely taking from pensioners and the unemployed and so on. Why can't these churches equally trust God to provide for them rather than resort to outright manipulative, and often guilt-laden tactics?     

Well the RBA held off on another interest rate rise – even though economists everywhere were predicting they would increase it by 25 basis points. 

Did anyone see the news on Fox tonight re median house prices in Sydney? Apparently will boom in 2010.