Why Investors Are Going Crazy For Australia

amanada drury cnbc

Australia is only one of three developed nations that will show positive GDP growth in 2009.

It has just half the unemployment rate of the U.S., sells China raw materials, and has a dynamic domestic economy.

Yet real estate, stocks, and the Aussie dollar have been soaring most recently.

Is there now a giant bubble down under?

We see it more like a giant wave.

There are risks, such as a China slow-down, but ride Australia correctly and you could do well even if some of the froth eventually comes falling down.

Why It’s All Good In Australia >>>

[slideshow]
[slide
permalink=”australia-blew-the-world-away-in-2009-1″
title=”Australia blew the world away in 2009″
content=”While the rest of the world fell into recession, Australia kept growing through 2009.

This alone says a lot for the economy.

Now it’s rebounding ahead of the pack as well.”
image=”http://static.businessinsider.com/image/4b0a72110000000000c0d07d/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”thanks-to-massive-demand-for-australian-commodities-2″
title=”Thanks to massive demand for Australian commodities.”
content=”One thing nice about Australia is that it has vast natural resources, which represent a huge source of untapped wealth.

Yet it still has a democratic society and is pro-business. Unlike many other resource-rich nations.

Commodity exports should generate US$150 billion of income during 2009, helping substantially to steady the economy during rough times.”
image=”http://static.businessinsider.com/image/4b0a6d0c00000000006e804c/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”there-would-be-no-china-without-australia-3″
title=”There would be no China without Australia.”
content=”Australia’s top commodity exports are iron ore, coal, and even gold.

Australia also exports many agricultural commodities plus other natural resources such as uranium.

The country is thus naturally well-hedged against inflation and is full of the raw materials developing nations need in order to industrialize.”
image=”http://static.businessinsider.com/image/4b0a778e0000000000c243f5/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”in-commodities-china-is-everything-now-4″
title=”In commodities, China is everything now.”
content=”Australia’s two largest commodity exports, ore and coking coal, are used for steel production. Which basically means they’re driven by China.

For example, Chinese steel consumption in 2010 is expected to be 522 million tons, more than the U.S., Europe, Japan, Korea, Russia, India, and Brazil combined.”
image=”http://static.businessinsider.com/image/4b0a7a860000000000a0cfb6/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”so-when-china-grows-australia-enjoys-the-ride-5″
title=”So when China grows, Australia enjoys the ride.”
content=”Thus China’s continued economic growth through the global downturn was key to Australia’s concurrent success.

China compensated commodities markets for declining consumption from the U.S., Europe, and Japan.”
image=”http://static.businessinsider.com/image/4b0a76c80000000000065a86/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”australias-iron-ore-exports-are-set-to-grow-18-next-year-6″
title=”Australia’s iron ore exports are set to grow 18% next year.”
content=””
image=”http://static.businessinsider.com/image/4b0a09820000000000255c79/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”coking-coal-should-grow-4-7″
title=”Coking coal should grow 4%.”
content=””
image=”http://static.businessinsider.com/image/4b0a09ca0000000000c9d085/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”gold-will-grow-15-and-isnt-china-dependent-8″
title=”Gold will grow 15%, and isn’t China-dependent.”
content=”Australian isn’t completely reliant on China-driven commodities.

The country’s gold production is expected to grow 15% in 2010 to 251 tons, amounting to about 10% of global mine production.”
image=”http://static.businessinsider.com/image/4b0a0aad000000000070a3bd/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”yet-theres-a-lot-more-than-commodities-in-australia-9″
title=”Yet there’s a lot more than commodities in Australia.”
content=”While commodities are the icing on the cake, there’s a lot more to the Australian economy actually.

In fact, the country’s services sector accounts for 70% of GDP according tot he CIA World Fact Book.

Syndey’s financial sector employment has grown to be half the size of London, and a third that of New York even. Australia also has a substantial manufacturing industry.”
image=”http://static.businessinsider.com/image/4b0a91380000000000b6eb7e/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”the-financial-sector-is-relatively-healthy-so-far-10″
title=”The financial sector is relatively healthy… so far.”
content=”Australia’s financial system was less exposed to toxic financial instruments than U.S., U.K., and Continental European counterparts were.

Australian banks took losses, and continue to, but nothing like the scale witnessed in some other countries, such as the U.S..

The government also moved quickly to stimulate the economy.”
image=”http://static.businessinsider.com/image/4b0a7ddf00000000005a7901/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”which-overall-has-lead-to-low-unemployment-11″
title=”Which overall has lead to low unemployment,”
content=””
image=”http://static.businessinsider.com/image/4b0a0fad0000000000446481/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”the-ability-to-raise-interest-rates-ahead-of-other-nations-12″
title=”The ability to raise Interest rates ahead of other nations,”
content=””
image=”http://static.businessinsider.com/image/4b0a10c00000000000f632c4/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”and-a-strong-currency-13″
title=”And a strong currency.”
content=”Higher interest rates, commodities strength, and relative weakness in the U.S. dollar have combined to drive the Aussie dollar towards parity with U.S. dollar.”
image=”http://static.businessinsider.com/image/4b0a06370000000000ff81bb/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”plus-the-stock-market-has-rebounded-14″
title=”Plus the stock market has rebounded,”
content=”Australia’s stock index, the ASX 200, has also staged a respectable rebound this year.

It still remains well below its previous highs.”
image=”http://static.businessinsider.com/image/4b09fec40000000000bc6b9c/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”and-property-prices-are-coasting-even-higher-15″
title=”And property prices are coasting even higher…”
content=”Some parts of Australia are hitting record property prices, particularly in Sydney and Melbourne.

These prices are running up despite the fact that Australian interest rates have already begun to rise.

The Australian government is now trying to keep its asset markets disciplined with rising interest rates while being sure not to choke off the country’s economy rebound…”
image=”http://static.businessinsider.com/image/4b0a28600000000000f0c0ca/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”so-what-could-go-wrong-16″
title=”So what could go wrong?”
content=”Up next… Australia Part 2: the wipeout.

And don’t miss: 12 Places To Go If The World Goes To Hell >>
image=”http://static.businessinsider.com/image/4b0a944f0000000000409061/image.jpg”
caption=””
credit=””
credit_href=””
]
[/slideshow]

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.