Ever since investors got jittery about a Chinese hard landing, global analysts starting predicting that Australia was in for a rude shift in its fortunes.
In April, Dylan Grice from major European bank Societe Generale wrote that Australia is "a credit bubble built on a commodity market built on an even bigger Chinese credit bubble."
Grice summed up his beliefs claiming that "Australia looks like leveraged leverage, a CDO squared".
While the calls look to be over the top, Australian fortunes have been changing throughout 2012.
In August, BHP Billiton the world's largest miner reported a 35 per cent fall in profits. Shortly after that announcement the Federal Resources Minister Martin Ferguson officially called the mining boom over.
"Look at Europe, the state of the European and global economy. Think about the difficulties in China. The commodity price boom is over and anyone with half a brain knows that," said Ferguson.
On top of that, prices for Australia's biggest export, Iron ore, have dropped 30 per cent in the past two months and are about 30 per cent below the prices that the government used to forecast $66.9 billion in revenue during 2012-13.
While many in Australia, including the Reserve Bank of Australia, aren't buying into the claims Australia is heading for a financial cliff, the following comments from global analysts are troubling:
*"I felt more relaxed when Australians called themselves the lucky country with their typical honesty, realism and humility. Now that it's been upgraded to the status of miracle I'm worried," said Dylan Grice after a recent trip to Australia.
* "Right now is not a time to be buying real estate in Australia. The market has slowed substantially but residential prices are likely to fall up to 60 per cent, possibly even more, within five years," said US real estate analyst Jordan Wirsz earlier in the year.
* SocGen's analysts recently wrote, "The strength of Australia is particularly hard to explain, given the recent weakness in figures like the housing data."
* Last week, Deutsche Bank's Adam Boyton and Phil Odonaghoe warned of the end of the investment boom and a 2013 recession in Australia. "It does seem to us that there is some complacency surrounding the prospect of a sizeable decline in the terms of trade – and some over-confidence that the investment pipeline is 'locked in'. While there may be reasons as to why this time is different ...history would counsel some caution on the investment outlook. Indeed, an average response to a circa 15% decline in the terms of trade would see business investment falling in year over year terms by early 2013."
What do you think of these predictions on the Aussie economy? Have your say on this story at our Facebook page
Treasurer Joe Hockey says more government spending cuts need to be made, but if reductions are made too quickly …