So true Bernard, but when all said and done Bollard is just another Central Banker who's action betoken one who's sole pre-occupation is to protect the debtor. If the housing market does catch afire again no doubt he will act all surprised (What me - I had no idea an ultra-low interest rate policy would have that effect?). We should never forget that Bollard's doveish interest rate policies in the period 2003-2006 provided the oxygen for the debt fueled binge in the first place.

Fortunately the markets (the FX markets at least) seem to be giving him the finger - the NZ$ is this morning back up just below 57c.........

Well said Andy .. and lets not forget how low interest rates affect savers..
Here's a snippet from the UK ..

"The average savings rate on a no notice account now stands at just 0.66%, based on a £5K balance, with 56% of these accounts paying a rate of 0.50% or less and 28% of accounts paying a miserly 0.10% or less."

Link to article here: http://www.marketoracle.co.uk/Article9794.html

The whole interest rate scene is a copy cat of the UK environment - same thing is happening there - banks say fix now long term is going up...

NZ Banks have unilaterally got together and dropped rates well down, prompting a flurry of fixed rate mortgage rate breaking which banks will have earned tens of millions from in a matter of 8 weeks, then a few weeks later they pump long term rates up and those who broke a few weeks earlier mass panic to refix before rates go higher.

Next step Bollard panics and lowers the OCR to 2% or less in his next two cuts. Long term rates then drop back to under 5% and all those that fixed in the last two weeks will break again and refix lower. Another round of break fee earnings for the banks and so it goes.

Am I wrong?

We are stuffed. We are tracking exactly what has happened in the USA. Bollard is pushing on the end of a piece of string. Whatever he does with base interest rates now will have negative effects that we do not want. This is the consequence of letting your real estate and mortgage markets completely swamp everything else in your economy.

Actually, historians now believe that King Canute knew full well that he couldn't hold back the tides... possibly the first recorded instance of someone using sarcasm to make a point.