Waiting for the usual dose of fried rice from a local Chinese takeaway – ordered in the post-Christmas avoidance of cooking duties and a meal which, incidentally, had experienced price inflation since my last visit – I discovered vital information about Ben Bernanke's borrowing strategy.
Hidden amongst a pile hospitality
trade publications and week-old newspapers was a surprisingly recent edition of Time magazine, featuring its 2009 'Person of the Year' – Federal Reserve chairman Bernanke.
There was no time to read the whole ponderous article – the food really was fast – but one fact stood out during my skim: in the wake of the historic low interest rates, which he himself had set, Bernanke had refinanced his own mortgage at a ridiculous 30-year fixed rate of about 5 per cent.
Get it while you can, I suppose, and Bernanke would have some insight into these opportunities. In any case, easier mortgage terms could be seen as a minor perk for saving the world from itself.
John Kay, writing in the Financial Times, is slightly more skeptical than Time magazine about the durability of Bernanke's rescue effort.
"... unless human nature changes or there is fundamental change in the structure of the financial services industry – equally improbable – there will be another manifestation once again based on naive extrapolation and collective magical thinking," Kay writes. "The recent crisis taxed to the full – the word tax is used deliberately – the resources of world governments and their citizens."
I can't help thinking he's right. The years ahead will most likely consist of rising interest rates and governments clawing back revenue from their citizens.
Our own Reserve Bank is cautiously optimistic about the future, as its December 2009 'Bulletin' reveals. But it would be nice if Reserve Bank governor, Alan Bollard, followed Bernanke's lead and disclosed his own mortgage terms – is he a fixer or a floater?
