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
So the Iron ore price sneezes and we are in trouble because as you point out iron ore represents 1/5 of all Australia’s exports dollars.
So what happens when we have dug up all the ground and there is no more iron ore to export?
Would not a good government balance the budget so the eggs are not all in one basket.
Why are we exporting our iron ore when we could make things ourselves and construct a manufacturing industry, even a good car industry. Then we don’t have to rely on cheap exports from China made from our iron ore.
We are back in 1938 when we had “Pig Iron” Bob Menzies and he sold iron ore to the Japanese and the Japanese sold our own iron ore back to us. 180 wharfies boycotted the wharves and prevented the loading of iron ore onto the ships to Japan.