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This review is from: Crash Proof: How to Profit From the Coming Economic Collapse (Hardcover)
Peter Schiff, son of American patriot Irwin Schiff, has written a very useful book that can not only assist you to take the concrete steps necessary for financial survival, but also change your individual psychology toward the storm on the horizon that is rapidly gathering strength. Today, we have the illusion of prosperity, and the sooner we break through that delusional state, the sooner we can prepare for darker days.
At this point, there are so many possible triggers for the Second Great Depression, it's striking that it has not already begun. The sub-prime meltdown may just be such a trigger that brings down the house of cards, once it becomes more clear which entities actually hold all the risk created as part of the Housing Bubble. Wall Street, sub-prime lenders, and the large banks have been ingenious in their ability to push risk onto other parties, but it's not clear if the counter-parties will have the ability to weather the defaults. Thus, the risk may yet reside with the banks, which normally would have been more restricted in the number of loans they could create by more traditional standards. So much debt has been created, and so much risk obfuscated, that it is hard to imagine our present illusion of prosperity can be maintained much longer.
Mr. Schiff breaks through our modern mythology by shattering these illusions, and here is where he shines best. A bear's bear, Mr. Schiff steps down from the towers of the economic elite to provide analogies that can be readily digested by more casual readers. The analogy of the Asians and the American trapped on an island together is apropos, as it reveals much about the true state of international trade. The Dollar Bubble heavily distorts trade in favor of America, which benefits disproportionately from the inflated value of the dollar.
Mr. Schiff also understands very well the entitlement crisis brewing, and aptly names Social Security a Ponzi Scheme. Most people in Generations X and Y understand that we're the bagholders scheduled for the Ponzi Scheme, but many Baby Boomers love to be delusional about this tragic farce, thinking it's a form of savings rather than our government writing worthless IOUs to itself and lying to the American people. They think Gen X "owes" it to them! Ha Ha! The sooner we can end social security, the sooner we can start saving real money with real assets. Until then, we are slaves waiting for generational emancipation.
I remember the first time I heard Mr. Schiff speak on CNBC. The discussion was about inflation, and I couldn't help but notice Mr. Schiff's definition diverged significantly from the definition used by the brainless cheerleaders on CNBC, and for that matter, our government and most of Wall Street. The proper definition of inflation is "debasement" and secondarily, "an increase in the supply of money which causes a rise in prices" (Webster's 1982). Note the difference between these two definitions and the more commonly used definition today, which is simply "a rise in prices."
CNBC would have us believe that money supply doesn't matter when you can fool people into believing that the risks associated with exuberant money creation won't be felt by anyone, or only by parties "most able to bear that risk." How convenient! What the government doesn't want you to know is that the Federal Reserve creates inflation, and both government and the Federal Reserve benefit from this inflation at everyone else's expense. In the history of every mania and crash, rampant money creation is behind the genesis of every one. Usually, it takes a unique form. In this case, it was the Housing Bubble. So, inflation and the Housing Bubble are intimately linked. As many have often pointed out, the Housing Bubble was needed to replace the Nasdaq Bubble that popped in 2000-2002.
Finally, the juicy part - how to survive. Mr. Schiff advocates foreign equities that are sound and pay excellent dividends, which due to the Dollar Bubble, might do very well. So long as there is sufficient domestic demand (abroad) after a currency revaluation, this appears good advice. Although, one has to wonder if the U.S. catches cold, would Asians follow?
Next, buy gold and silver, and mining shares. This is pretty standard advice from the "Gloom and Doom" crowd as we are sometimes named. Lastly, he recommends staying liquid, which generally means reducing debt and keeping assets in a form that can be readily converted from one type to another. He recommends leveraging overvalued home equity in other currencies and storing small amounts of imported goods likely to rise in price, and a few other measures.
The piggy bank on the cover is a nice touch, and the list of books for further reading is most helpful for those who have not already read many of the titles.
A very quick read, easy to understand, and very well put together. I highly recommend this book.
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Showing 1-10 of 13 posts in this discussion
Initial post: Apr 8, 2007 7:21:02 AM PDT
Excelllent! BRILLIANT! Could not have been written any better.
Posted on Dec 1, 2007 7:53:07 PM PST
Donald I. Cheeseman says:
The best and most accurate review that I've read.
Posted on Jun 12, 2008 4:33:19 AM PDT
Richard C. Pomaibo says:
Great review! I'm still waiting for a "Europac.net" bumper sticker to come out. Sure would look good next to my Ron Paul sticker. How about some Europac.net T-shirts? I'm sitting out the 2008 election (but I'll write in Ron Paul anyway) and turning more people on to Europac would be more beneficial than supporting McCain or Obamma...
Posted on Jun 12, 2008 4:00:22 PM PDT
Michael David says:
Great book with solutions to protect your wealth inside the collapsing U.S. economy!
Posted on Jun 13, 2008 9:08:18 AM PDT
Cindy L. Burdue says:
An extremely helpful review which will hopefully encourage people to read this excellent book and, thereby, take the most important step they can take to protect their financial future!
Posted on Jun 15, 2008 3:04:24 PM PDT
Wonderful review. Mr. Schiff should be front and center in every media outlet. I've been very happy as a client of his firm. What else can be said? He speaks the truth about the problems in our country. The sooner we take our heads out of the sand as a collective whole, the sooner we will be on stronger footing as a nation.
In reply to an earlier post on Jun 26, 2008 11:14:48 PM PDT
Mr B says:
Posted on Jun 26, 2008 11:16:11 PM PDT
Mr B says:
Posted on Jun 29, 2008 9:20:25 AM PDT
Andrew Coonce says:
Good review. When I first heard about Schiff's book, I read a negative review on Amazon, and, as a result, I almost didn't buy the book. The only reason I got it was because it was part of a 3-for-1 deal at the time. Man, am I glad I did that! I know enough economics and politics to recognize that his reasoning is sound and dead spot on. That's been confirmed by the fact that everthing he predicted in the book is now happening. I'm now a cleint of Europacific Capital, and I've made some pretty sweeping changes in my investments. I've been trying to tell family and friends about the book, and about what's coming, but they pretty much don't listen. I only wish I had read the book a year earlier....................
Posted on Jul 3, 2008 12:16:14 PM PDT
P. Smith says:
Peter has nailed it! It is spooky how everything he has written has come true. Ignore his advice (or laugh at it as they do on CNBC) at your own peril.