Fraser had more than a few battles with Americans on her way to winning eight Olympic medals and believes the Australian team will hold their own despite preparations hit by injury, disciplinary problems and Ian Thorpe's failure to qualify.
"We've always had great competition against the U.S.," the 74-year-old, who won the 100 metres freestyle at three successive Games from 1956 to 1964, told Reuters.
"I don't think the Americans will have it all their own way - it's a scare tactic. We're educated to those sorts of things and in our own quiet little way Australia will do their own thing."
Fraser recalled that the Americans had tried similar scare tactics before the men's 4x100m relay at the Sydney Olympics, only for it to famously blow up in their faces when the Australians ended their seven-Games monopoly of the title.
"You know the USA boys said: 'we're going to show you how to play the guitar' and our men's relay team beat them," she said, chuckling at the memory. "Our boys got out and started playing their air guitars."
In London, it will be in the 4x100m relay that America and the world's top swimmer, 14-times gold medallist Michael Phelps, will come face-to-face with Australia's new golden boy, 100 metres freestyle favourite James Magnussen.
Known as 'the Missile', world champion Magnussen has backed up confident predictions about his ability to break the world record in the blue riband sprint with a string of fast times.
Fraser, still considered the finest female sprinter of all time, was herself often slammed for being 'excessively cocky' in her pomp and clearly identifies with Magnussen's confidence.
"While I haven't met the young man, I think that if he stays as confident as he is and doesn't get cocky I'm sure he's going to give Phelps a bit of a shock," she said.
"I think James Magnussen has been training extremely hard for his duel with Michael Phelps and I think that the best man of the day will win regardless of whether it's Phelps or 'the Missile'."
While Magnussen is in the form of his life heading to London, Stephanie Rice is battling a shoulder injury as she prepares to defend the 200 and 400m individual medley golds she won in Beijing.
Fraser says swimmers are used to competing in pain and is confident Rice will have no problems getting up for the London Games.
"When it comes to the greatest sporting event in the world, and it only happens unfortunately every four years, she'll swim through it, I'm sure," Fraser said.
There was sympathy too for 200m butterfly hopeful Nick D'Arcy and 200m freestyler Kenrick Monk, who will return home straight after their events as punishment for posing with guns in a picture posted on social media site Facebook.
Fraser battled with authority throughout her 15-year career and was prevented from going for a fourth 100m gold at the 1968 Olympics by a 10-year ban for stealing a flag from outside the Japanese Emperor's palace at the Tokyo Olympics.
Even if D'Arcy will forever be associated with the violent attack on a team mate that saw him banned from the 2008 Olympics, and Monk by the false report to police about injuries he sustained skateboarding, Fraser feels they were harshly dealt with.
"They were just being boys," she said. "I don't think we taught these men and women how to use social media to their advantage, not against themselves."
There was less sympathy for five-times Olympic champion Thorpe, who failed in his bid to come out of retirement and get back into condition to compete in London over a period of just 14 months.
"Thorpey's absence from the 2012 London Olympics is a disappointment, (but) his body was soft," Fraser said.
"I've never seen him like that. When Thorpey was at his top, his muscles had muscles on top of one another, that's why I think he was so soft."
Now a snowy haired septuagenarian who acts as an ambassador for the Laureus sports foundation, Fraser will be travelling to London to attend the Games with her grandson.
Still struggling with a few remaining symptoms of a recent bout of bronchitis, she signed off with a bit of typically grandmaternal advice for the 47 swimmers competing under the Australian flag in London.
"Stay focused on your event and nothing else. Eat, sleep and drink it," she said.
"(And) if you don't wrap up and look after yourself, you are inclined to get a cold, and that's the worst thing a swimmer can have."
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- Michael Phelps
- James Magnussen