Yes its crazy, but people keep bringing it up. Australia floats between 45 and 70 in the world because we are a long way from the rest of the world, don't play many qualification games, used to be a F.A. managed basket case.
In reality the side is probably 25-30 in the world.
The USA is not that good, but neither are they as bad as I have read people who suggest the rankings are flawed, think.
Asian teams who aren't very good, but play each other alot (excluding Japan, S.K., Saudis, Iran and China) go up the rankings, as do weak CONCACAF teams. The more these sides play each other, the more points a win against each other is worth. The system is seriously flawed.
Unfortunately the ranking system is used for FIFA tournament seeding.