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<p>[QUOTE=&quot;Ainslie Bullion, post: 2226762, member: 75209&quot;]It’s been a rough week for the Australian economy.&nbsp; We’ve see a ‘surprisingly’ weak GDP print of just 0.2% for the last quarter or 2% for the year, but in nominal terms (with the effects of inflation excluded) GDP growth was just 1.8%, that’s the weakest figure since 1962 and it saw our AUD drop momentarily into the 60’s.&nbsp; What makes this look even worse is our current account deficit blew out to $19billion for the same quarter.&nbsp; To put that simply we had to borrow $19b to produce just 0.2% of economic growth.&nbsp; Yesterday we saw retail figures fall for the first time in a year as well which is worrying as it is a sign we are ‘going to ground’ which will only worsen GDP.&nbsp; This shouldn’t really come as too big a surprise as our real disposable income fell 1.2% per person for the same quarter (and is down 2.3% for the year!).&nbsp; </p><p><br /></p><p>This is our new post mining boom norm and its why we are seeing headlines like today’s AFR quoting Deutsche Bank predicting a 66c AUD by the end of this year and 50c next year.&nbsp; That’s great for our exporters but will raise the cost of living for the rest as imported goods (and a $19b trade deficit highlights how much we do that…) go up in cost.&nbsp; It’s also great news for gold and silver holders.&nbsp; Most understand (and yes we’ve written of it many times) this relationship but few get the gravity of it.&nbsp; So here is another example to highlight it.&nbsp; Today we are at 70c, gold spot is at USD1126, and gold in AUD is $1605.&nbsp; If the USD spot does not move an inch and if Deutsche (and they are certainly not alone) are correct, your gold will be worth A$1706 (up 6.3%) by Xmas and A$2252 (up 40.3%) next year!</p><p><br /></p><p>On a final note, this week we saw both Canada and Brazil slip into outright recession.&nbsp; Like us they are heavily reliant on the commodities at a time when commodities across the board are in the can.&nbsp; At 0.2% we are not far off a negative print.&nbsp; Let’s hope we keep it that way…[/QUOTE]</p><p><br /></p>

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