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Merchant of gloom makes a bet

29 Nov 2008 2:30 AM

An academic who expects zero interest rates within two years and a 40 per cent drop in house prices has promised to walk from Canberra to the top of Australia's highest mountain if he's wrong.

University of Western Sydney associate professor of economics and finance STEVE KEEN made the bet with Macquarie Group interest rate strategist RORY ROBERTSON.

Dr KEEN expects Australian house prices to plunge by 40 per cent within five years .. double the drop in the troubled US market.

The academic who sold his inner-city house earlier this year also says the Reserve Bank of Australia will cut official interest rates to zero per cent by 2010 as spiralling debt levels push the economy into a depression.

His challenger .. MR ROBERTSON says DR KEEN'S gloomy predictions of an Australian housing market plunge had a one per cent chance of being right.

And he says on the one in 100 chance Dr KEEN is right .. he'd make the 200km trek from Canberra to Mt Kosciuszko .. in the Snowy Mountains of NSW.