The words in the headline quote are of Australian Treasurer Wayne Swan. That’s how he described his country’s economy relative to the rest of the world after the Australian Bureau of Statistics (ABS) reported Wednesday that first-quarter gross domestic product (GDP) expanded by 1.3 percent quarter over quarter, about double the 0.6 percent median forecast.

The annual GDP growth rate accelerated to 4.3 percent. The year-over-year growth rate is helped by comparison to the first quarter of 2011, which was marked by terrible weather across much of the country, but it’s still clearly a strong number.

Chalk up Mr. Swan’s ebullience to a native bias in favor of the hometown team, if you will, but on this score the facts happen to be on his side, too; it’s okay to brag if you are at the top, and Australia’s first-quarter GDP growth rate is better than any posted by any other developed market for the first quarter of 2012.

Consider:

The US, still the world’s biggest economy, posted a US 1.9 percent annualized GDP growth rate in the first quarter. Canada, Australia’s Commonwealth Cousin and No. 10 in the world in GDP terms according to the International Monetary Fund’s (IMF) ranking for 2011, matched the 1.9 percent annualized pace of the US. The Great White North grew by 0.5 percent from the fourth quarter of 2011 to the first quarter of 2012.

The Japanese government said that the Land of the Rising Sun’s GDP grew 1 percent in the first quarter, or at an annualized rate of 4.1 percent. Japan is now the third-largest economy in the world, trailing the US and China. The still developing Middle Kingdom, incidentally, grew by 8.1 percent in the first quarter, slowing from 8.9 percent the previous three months to a three-year low.

In Germany, GDP grew by 0.5 percent from the end of the fourth quarter of 2011 to the end of the first quarter of 2012, beating expectations and besting the 0.2 percent contraction from the last three months of 2011. Europe’s largest economy and the fourth-largest in the world grew by 1.7 percent during the 12 months from the first quarter of 2011 to Mar. 31, 2012.

French GDP stagnated during the first three months of the year. The UK posted a 0.3 percent GDP contraction compared to the final quarter of 2011. Italy’s economy contracted for a third straight quarter, with GDP dropping 0.8 percent from Dec. 31, 2011, to Mar. 31, 2012.

The Netherlands also recorded its third quarterly contraction in a row. France, the UK and Italy are Nos. 5, 7 and 8 in the IMF’s GDP rankings for 2011.

World No. 6 Brazil posted 0.2 percent quarter-over-quarter growth, while expansion was 0.8 percent year over year. The largest economy in South America posted its slowest growth in two years. In 2011 Brazilian GDP grew by 2.7 percent, down from 7.5 percent in 2010.

Ninth-ranked Russia posted an impressive 4.9 percent GDP growth figure for the first three months of 2012 after expanding by 4.8 percent during the final three months of 2011. The current figure is the fastest since the three months ended Sept. 30, 2011, for what is still considered a “developing” economy.

India, No. 11 in the IMF GDP rankings for 2011, expanded by 5.3 percent, but that’s its slowest rate of growth in nearly a decade. And the story of the final country to rank above Australia, Spain, is well known by now to all who venture to read Down Under Digest: The economy on that part of the Iberian Peninsula contracted by 0.4 percent during the first three months of the year.

On Tuesday, teeing up the ABS with an act that was easy to follow, the Reserve Bank of Australia (RBA), acknowledging what were then present realities and preparing for further deterioration in the global economic situation, reduced its target overnight cash rate by 25 basis points to 3.50 percent from 3.75 percent Tuesday, Jun. 5, in Sydney.

Tuesday’s move in Sydney brings to 75 basis points the RBA’s total reduction in its benchmark interest rate over the past two months. Traders, based on action in the Australian Securities Exchange (ASX) Interest Rate Swap Futures market, had anticipated a cut on the order of 50 basis points; they reacted to the more conservative cut by bidding up the Australian dollar.

The big surge came late Tuesday night on the East Coast of the United States but early morning Wednesday Down Under when the ABS confounded prognosticators with its GDP report.

The Australian dollar was worth USD0.9912 as of this writing, well off the 2012 low it established Friday, Jun. 1, at USD0.9701 and up from Monday’s close of USD0.9728. The aussie has declined from a 2012 high of USD1.0809, which it first established Feb. 7 and matched Mar. 1.

The Bank of Canada (BoC), meanwhile, opted to keep its target overnight rate at 1 percent during its Jun. 5 meeting in Ottawa. The US Federal Reserve will make its next interest rate statement Jun. 21, following the fourth of its eight regularly scheduled monetary policy meetings for 2012. The target range for the fed funds rate remains 0 to 0.25 percent.

The European Central Bank (ECB) held its overnight interest rate at 1 percent on Jun. 6.

RBA Governor Glenn Stevens’s regular post-meeting statement concluded, “The board judged that, with modest domestic growth and a weaker and more uncertain international environment, the outlook for inflation afforded scope for a more accomodative stance of monetary policy.”

The RBA, which meets 11 times a year (or monthly except January), will make its next decision on Jul. 3. Forecasters such as Westpac Banking Group (ASX: WBC, NYSE: WBK) Chief Economist Bill Evans are predicting the RBA’s cash rate will be as low as 2.75 percent by the end of 2012.

The blowout first-quarter GDP number is certainly a cause to celebrate–and to focus on Australia as a potential investment destination. A lot still depends on what happens from here in Europe and China. Resolving Spanish banks and Greek politics are first steps on the Continent. Middle Kingdom officials continue to introduce policies designed to boost consumption and investment without making explicit and big-dollar “stimulus” announcements.

These externalities will have a significant influence on second-quarter growth Down Under.

The Case for QE3

The yield on the 10-year US Treasury note remains near historically low levels, though it has crept up over the last couple days along with hope for a solution to the European problem. Doubts about the efficacy of another round of so-called quantitative easing–electronic money-printing–in an environment where official rates are already so low, even in the face of last Friday’s indisputably bad employment report, are high.

But in a Feb. 3, 2011, speech US Federal Reserve Chairman Ben Bernanke said the following about the first two rounds of quantitative easing:

A wide range of market indicators supports the view that the Federal Reserve’s securities purchases have been effective at easing financial conditions. For example, since August, when we announced our policy of reinvesting maturing securities and signaled we were considering more purchases, equity prices have risen significantly, volatility in the equity market has fallen, corporate bond spreads have narrowed, and inflation compensation as measured in the market for inflation-indexed securities has risen from low to more normal levels.

In other words, driving down rates is just one of several potential goods Mr. Bernanke sees in Vitamin Q. Conditions don’t appear to be as dire as they did five days ago. But conditions can change rapidly.

There is one near-certainty, however, and that is the inability or the unwillingness of US fiscal policymakers to do anything in a hot election year that would alter election calculi to one’s advantage or disadvantage.

Get Protection, Get Paid

Gold enjoyed its biggest single-day bounce in nearly a year last Friday, rising 3.7 percent to erase what to that point was a weekly loss. The 3 percent gain for the week ending Jun. 1 perhaps finally signals that bullion has broken its trend of trading in sync with risk assets. Weak US employment growth–only 69,000 jobs were created in May, against a consensus expectation of 150,000, and the unemployment ticked up to 8.2 percent–may have been the final straw on a pile that included rising Spanish and Italian bond yields and Greek political chaos.

These factors have receded against the rising hope for solutions, but these potential solutions haven’t cooled renewed ardor for the Midas metal.

In Greek mythology Medusa was one of the three sisters known as the Gorgons. The only mortal among the three, the once beautiful Medusa challenged the goddess Athena and was punished with hair of snakes and a visage so ugly it would turn those who gazed upon her to stone.

But this monster of the underworld’s name means “guardian” or “protectress.” It is for this that Australia-based gold producer Medusa Mining Ltd (ASX: MML, OTC: MDSMF) honors her.

We profiled Medusa, which doesn’t hedge its gold output and so provides exposure to movements in bullion, in the May 2012 In Focus feature of Australian Edge. Since then Medusa has rallied nearly 10 percent on the Australian Securities Exchange (ASX) and has generated a total return in US dollar terms of 8.3 percent. The S&P/ASX 200 Index shed more than 5 percent during this timeframe, while the S&P 500 Index surrendered 2.8 percent.

Medusa produced the fifth-best total return among the 200 stocks included in Australia’s benchmark index. In addition to pure exposure to gold bullion it yields 1.8 percent at current levels.