Here is his latest note about the issue (via Business Insider):
Any serious Australian historian or financial analyst is aware that things don’t go up forever and that there are macro-economic cycles that impact any commodity producer with a force far more powerful than it hits manufacturing and service economies. What is going on in Europe and the United States will tear a tremendous hole in the Australian economy. Despite the fact that Fitch just upped Australia to AAA, within hours of the time it warned the US of a downgrade, the Aussie current account deficit and its dependence on offshore financing will change the outlook from sunny to stormy within an extremely short time. The only variable necessary to bring this about is a drop in Australia’s terms of trade, historically a notoriously volatile measure. Even though Australia’s dollar dropped from 91 cents against the US in July 2008 to 67 cents in October, only three months later, the weakness didn’t last long. The Aussies were lucky as the Chinese threw massive amounts of money in an effort to rally its domestic economy and much of the money bought Australian commodities. This only happened because the Chinese financial system is so rudimentary that the flood of cash had to be parked in orders and stockpiles of physical commodities. That won’t happen this time as inflation is forcing the Chinese government to tread more cautiously.