I found quite interesting the following RBA paper :...

I found quite interesting the following RBA paper :

rdp1999-06.pdf - Google Search
www.rba.gov.au/publications/rdp/1999/pdf/rdp1999-06.pdf

It suggests the 1890's depression was worse for Australia than the 1930's depression. Mainly because of collapse of several banks. These banks primarily collapsed because of a speculative housing bubble in the late 1880's that was funded by risky loans.

Fast forward to today and it seems we are in a similar boat, although not quite the same situation. Our currency today is floating which cushions the impact of a recession and supposedly our big 4 are well capitalised.  

Kind of makes me wonder how bad it could get here in Oz. Could our big 4 come under pressure due to loan defaults? Could we end up in a localised depression?

And before Timber points it out, this does have relevance to gold because the currency would come under attack if there's a sniff of bank failures on the horizon. And this might be a reason to hold gold or USD.