No, really?

It is reasonably clear that the U.S. economy is entering a period of transition.

This statement of the bleedin’ obvious brought to you by Ben Bernanke, Chairman of the Federal Reserve. You know – the guy who causes the stock market to jump a hundred points up or down every time he says anything? “Gee, this sure is a great shrimp cocktail!” UP! UP 200 POINTS! “Oh, I can’t have artichoke dip, it gives me heartburn.” DOWN! DOWN 300 POINTS!!!!!!!!

**sigh**

OK, don’t get me wrong. I have the utmost respect for Mr. Bernanke. Even if he, and I do mean he personally, is causing my HELOC to inch upward every time he gets together with his cronies over there at the Federal Reserve. I do not envy him his job one little bit. See, if I mess up on the job…well, one (1) company might lose a few thousand (OK, maybe million, it depends on which project) dollars. Not that this doesn’t cause me some amount of pressure, but it is nothing like holding the entire American economy in my hands and trying not to, uh, break it.

Toss in that you’re new to the job, coming in not only in a {euphemism alert} challenging economic time {/euphemism alert}, but on the heels of {angelic music} Alan Greenspan {/angelic music}…well. I wouldn’t wish that on my worst enemy.

But perhaps he needs a little translating. What his statement means, in Americanized English, is the following: “Wow, the economic poop is about to hit the recessionary fan, folks!”

There. Does that clear it up for you? I think I can clear up a few other statements here, too:

“Although we cannot ascertain the precise rates of resource utilization that the economy can sustain, we can have little doubt that, after three years of above-trend growth, slack has been substantially reduced.”

Folks have been spending way more than they can actually afford [largely courtesy of low interest loans], and have fairly well maxed out their options.

“A slowing of the real estate market will likely have the effect of restraining other forms of household spending as well, as homeowners no longer experience increases in the equity value of their homes at the rapid pace seen in recent years.”

That whole thing where you rack up an extra $15,000 - $25,000 in spending each year and then wave the Magic Refinancing Wand over it to make it just ‘go away’? Not gonna happen in the Coming Economic Times.

“Anecdotal reports suggest, however, that the labor market is tight in some industries and occupations and that employers are having difficulty attracting certain types of skilled workers.”

If your field requires experience and/or education, you won’t be hurt as bad as, say, the guy who carries heavy boxes for a living.

“Toward this end, and taking full account of the lags with which monetary policy affects the economy, the Committee will seek a trajectory for the economy that aligns economic activity with underlying productive capacity.”

We’re gonna take our best shot on this whole interest rate thing and hope for the best.

I think the one thing that we should take away from this is the one thing that isn’t actually said out loud, ever:

Harder times are coming. Put your house in order. See to it that you are spending your money wisely. Don’t buy stuff you know full well you can’t afford. Hint: if you HAVE to charge it, you can’t afford it. Get rid of debts that can double in cost without warning. Have a cash reserve to live on in case that job you’re so sure you’d never lose suddenly goes *bampf!* on you – or slashes your benefits down to nothing. Brace for a wild and bumpy ride in the stock market – your 401k may zigzag like a garter snake on linoleum. Don’t panic. Be patient. And keep your powder dry.