An ounce of gold today in US dollars is around $1,160. The same ounce will cost $1,550 Aussie dollars. Why the difference? Answer: the weakness of the Australian dollar.
Why is the Aussie dollar weak? Because in part our major export iron ore has in the last 12 months fallen from $98 a tonne to $44 dollars a tonne i.e the price has halved for the same volume. The golden WA goose is dead.
Why is iron ore so important? Answer: because it represents 1/5 of all Australia’s exports dollars and the halving of government royalties from iron ore exports means a budget ‘king hit’ estimated at $6.5 billion over the next two years. Australian lifestyles must fall.
What can ordinary Australians do to improve things? Like the Greeks, vote for better governance, because things are going to get much tougher over the next two years.
Terry Sharples, Tweed Heads