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14 of 14 people found the following review helpful
4.0 out of 5 stars Common Sense Investing In A Dangerous Economic Climate, June 30, 2012
This review is from: Survival Investing: How to Prosper Amid Thieving Banks and Corrupt Governments (Hardcover)
This short, 242-page book is pithy and very easy to read. The material in it is
fascinating. The former Goldman-Sachs investment banker lays out his practical theories
in s simple, straight forth mannner in 14 brief chapters and an Introduction and detailed index. Those 14 chapters include, "Corruption in the Banks, The United States Stumbles and Falls, The Entire World Faces Default, No Reform Coming, The Low-Wage Threat of China and India, Why Economists Don't Get It, Why Markets Don't Behave the Way They Are Supposed To, Why Stocks, Bonds, and Money Markets Won't Cut It, Only an Idiot Would Lend to a Sovereign Government, Why Diversification Won't Help, Real Assets--Real Returns, Gold as a Yardstick and as an Investment, " and "A Brave New World."
Those chapter titles provide a quick overview of the book's main themes. Frankly I found Chapter 12 "Real Assets--Real Returns" the most interesting. That's because so few people understand that paper assets are just that, paper assets. Real assets are things like "gold and other commodities: land, houses, office buildings, apartment buildigns, and even small businesses."
"There are many advantages in moving your assets from financial securities to real assets.
"First, by focusing on the purchases of real assets, you'll free yourself (to a great degree) from dependence on corrupt bankers and self-interested stockbrokers and financial advisers." Governments are deliberately printing and depreciating their currency to help balance their bloated budgets. "Over the last 52 years, the dollar has devalued relative to gold by 98 percent. "
There were some surprising recommendations included in this book. While most folks think the housing market is a disaster, the author feels that the time is right to buy a home if you can afford it. "The best real asset in this environmnet, I think, is your own home. To those of you who are still renting, I would recommend you go out and buy." But investigate your market carefully and don't overpay so that you don't have any money left over after paying the mortgage.
The author explains how the bubble factor in housing has pretty much deflated to the 1997 price levels before the bubble began. He points out that interest rates are as cheap as they have ever been and if they go lower, mortgages can still be refinanced to the lower rate. The author considers this as one of the best, "perfect" times in history in which to buy a home. "Because you can use enormous leverage in the purchase of a home (again, where else can you borrow five or six times your income to make an asset purchase?), the potential returns to you as a homeowner are tremendous. Even though your home may not apprecate a single dollar in real terms, if it just keeps up with inflation and your debt costs are fixed, then simple arithmetic says that your equity investment will explode."
That's one of the important points the author makes--the difference in real assets that simply maintain their value, but have to be sold (like commodities) in order to cash out and those real assets that provide regular income without having to sell the assets. Most people need both.
This page-turner is written as if it were taken from lectures or media interviews the author has been giving to live audiences. It's easy to follow and understand. Important points are backed up by examples that most people can identify with and believe. Alas some of the other problems and economic realities the author points out may depress the heck out of the reader. He points out how the world is ruled by the banks and their lobbyists. After he explains some of the many unbelievably complex problems about to explode in the world's financial and political systems, he isn't able to offer much in the way of suggestions for solving the problems other than some steps investors can take to protect themselves and their families as best they can. This is definitely a good investment guide, even if only part of the book's advice is followed.
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