The week of the Australia Day long weekend saw the All Ordinaries Index fall to its March 2007 level, wiping all the gains made in those past 10 months.
We had 17 straight days of falls on the Australian Securities Exchange, followed by three days of gains - and we are now back to a total loss of 8.4 per cent since December 27, and a loss since the record high in November of 14.1 per cent.
Yes, losing a year's earnings is big news, the biggest in almost 30 years but it's not as big as the 20 per cent drop we would have to lose before being in a recession. However, we are only one month off if the volatility of the last month continues.
Those hit hardest will be those who have geared into portfolios which have now seen them lose capital - and perhaps caused a margin call, eating into their cash flow.
One planner IFA has been talking to from the flood-affected far north who has been calling his clients to reassure them about their investments, found they were without exception unconcerned about the short-term fluctuation of their investments. Of primary concern was the flood, and then the share market, he says, which gives a sense of perspective.
Despite sharp falls on exchanges around the world, markets are forecasting rising inflation, which has caused gold to reach a record price of US$914, around $1035.
Last month, Reuters published its annual precious metals price poll, with forecasts from 50 analysts. The median gold price prediction for this year was $US850 an ounce, with a range between $US750 and US$1056, a considerable hike from the median of 2007.
It's good to be able to be bullish about something, other than rising inflation and falling economic growth.
