Ben Bernanke Warns of Subprime Crisis, Aussies Too Poor To Budget

How useless is Ben Bernanke? Not only is it his stated policy to ruin the quality of America's money, but now he also warns us two-years too late that the American housing market is in trouble and leveraged buy-outs might be a problem.

Bloomberg reports that Bernanke, "issued a double-barreled warning on the U.S. economy, saying the housing market will continue to struggle and the Fed sees ``significant risks'' in the leveraged-buyout boom. Bernanke, speaking at a conference in Chicago today, said curbs on subprime lending `are expected to be a source of some restraint on home purchases and residential investment in coming quarters.' And he said the Fed is `beginning to look at' what he called 'the risks that are associated with working with private- equity firms.'

Too late Ben! You should have begun looking a few years ago, when your pal Alan Greenspan lowered short-term interest rates to 40-year lows and kicked off the leveraged boom that has no engulfed-and endangered-the whole world.

Meanwhile, according to an article at news.com.au, "A survey conducted by career networking site Linkme.com.au shows that 34.3 per cent of Australians live 'pocket-to-mouth'. And while 82 per cent would like to plan their finances better, 43.5 per cent say they did not make enough money to be able to budget any differently. And for 29.6 per cent in the survey of more than 800 respondents, they say unexpected expenses always get in the way of getting ahead financially."

Hmm. Unexpected expenses are unavoidable. Sometimes you break your arm and need a cast. Sometimes your car needs work. And if there's a hole in your roof, you can't afford not to fix it.

But how is it possible that things are so bad you can't afford to budget differently? If things are that bad, can you afford to keep making the same mistakes? It's an absurd statement, that you can't afford to do things differently. People are finding out the hard way that you can't get something for nothing. Only they refuse to believe it. Too bad.

Dan Denning
The Daily Reckoning Australia

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