WELL, well, well. Fuel prices have just moved above $1.70 a litre, the Government is talking about a new carbon tax, the demand for home loans has suffered its biggest fall in eight years, consumer confidence is at a 16-year-low and there are still fears the Reserve Bank pf Australia (RBA) may jack up interest rates at least one more time in the next couple of months.

Enough already! What does it take to convince the “experts” the average punter is already punch drunk from a whole host of hits that has Australians more nervous about the future than at any time in decades.

Commonwealth Bank economist Michael Workman told the media yesterday that because employment had risen at a time when the pundits expected it to fall, an interest rate rise was still on the cards.

“We still see the risks skewed to an RBA rate rise in the coming months,” he said.

There is a certain mysterious lack of logic about all of this that leaves you wondering just what the RBA interest rate hikes were designed to achieve in the first place.

Our understanding was that the experts feared the housing market was overheating due to excessive consumer demand.

Hiking interest rates would have the effect of taking things off the boil, reducing inflationary pressures and creating a sense of longer term pricing stability.

It was reported yesterday that the number of housing loans had fallen by 7.9 per cent in the May just gone – the biggest fall in eight years and close on four times what had been expected.

That is a pretty significant shift in consumer sentiment.

Just how far off the boil does the RBA want the property market to go?

While there has been much criticism of inflation and the rise in house prices experienced across the land since about 2000 some thought should be given to the alternative.

Deflation – and falling property values – can be equally catastrophic.