meanwhile down at the reserve bank

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    Reserve governor's dire warning on debt implosion

    The governor of the Reserve Bank has renewed his warnings about the dangers of household debt in Australia.

    Ian Macfarlane has told a forum in Sydney that a significant number of householders and investors have taken out large loans in a low-interest environment, without taking into account a possible economic downturn.

    The situation eventually will come to an end at a significant cost to the economy, Mr Macfarlane says.

    "In theory the way it would end is that people would have difficulty finding tenants and rents would fall sharply, and so the rate of return on the investment would fall, and so people would stop buying new ones," he said.

    "That often takes a long time to happen. We don't actually know how long it takes to happen."
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