Will the latest interest rate rises by both the Reserve Bank to restrain booming spending and by the commercial banks to restore their profit margins cause a hard landing in NSW, Victoria, Tasmania and South Australia? No gain without pain, as the utilitarians would say? This is a scenario of rising bad debts, foreclosures, falling property prices and fire sales; investment , hedge fund and corporate company collapse from margin calls as the credit crunch from the subprime crisis deepens; lower growth and rising unemployment.

The Reserve Bank takes a largely benign view of the unfolding credit crisis, believing China's growth will insulate us from its worst consequences. The RBA does not have a good history of managing soft landings. Will we hear the snap as distinct from sounds of the steady decline or slowdown? Where is the tipping point in terms of interest rate increases?