- Series: Agora Series
- Hardcover: 320 pages
- Publisher: Wiley; 1 edition (September 29, 2003)
- Language: English
- ISBN-10: 0471449733
- ISBN-13: 978-0471449737
- Product Dimensions: 6.2 x 1.2 x 9.5 inches
- Shipping Weight: 1.3 pounds (View shipping rates and policies)
- Average Customer Review: 65 customer reviews
- Amazon Best Sellers Rank: #1,216,198 in Books (See Top 100 in Books)
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Financial Reckoning Day: Surviving the Soft Depression of the 21st Century 1st Edition
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“This book is an intellectual tour de force.” (GetAbstract.com)
“…a very level-headed book for adventurous readers.” (Accounting Technician, May 2004)
This worthwhile, well-organized book presents insights into the current U.S. economy by comparing contemporary economic events with historical ones, especially such systems as Japan's in the 1990s and the United States in the 1930s. Find out why high-spending, high-borrowing consumerism leveraged the U.S. economy and also what the "soft depression" means for investors. (Best Business Books 2003, Library Journal, March 15, 2004)
"...The authors...come up with some disturbing conclusions..." (The Journal, Newcastle, 5 February 2004)
"...every serious investor should read this book..." (www.iii.co.uk (AMPLE), 6 January 2004)
"...the book has rattled me enough to prompt further inquiry." (The Telegraph, 13 December 2004)
From the Inside Flap
Is the U.S. economy turning Japanese?
According to maverick investment writers Bill Bonner and Addison Wiggin, the countrys current economic picture mirrors that of Japans decade-old "soft depression"caused by an aging population and a structural reaction to its record-breaking financial boom.
As the U.S. downturn drags on, investors want to know whats behind it all, whats in store, and what they can do to safeguard their investments. Financial Reckoning Day: Surviving the Soft Depression of the 21st Century helps you chart your own financial destiny in todays precarious investing climate. Irreverent and eye-opening, this "big picture" investment book starts with a simple premise: history shows us that investing has less to do with raw economic data and new statisticsthe domain of most other investment booksand more to do with old rules, metaphors, and experience.
Putting this unique metaphorical focus (and its underlying principles) into action, Financial Reckoning Day draws upon military and sociopolitical milestones to highlight the surges and slides of history. Going a step further, the authors emphasize the powerful relevance of these events to todays economic uncertainties.
Brimming with down-to-earth wisdom and take-it-to-heart lessons, Financial Reckoning Day tells you:
- Why the "Information Age" stock boom went bust, with sobering insights into such companies as Amazon.com, Cisco Systems, and Global Crossing
- Why high-spending, high-borrowing consumerism "leveraged" the U.S. economy and what you might expect from the "soft, slow depression" in the decade ahead
- Why Japans "miracle economy" unexpectedly collapsed and why a decade of monetary stimulus has failed to revive it
- How the Civil Warand the financing of wars in generalled to the creation of the central banking system
- What the legacy of Fed chief Alan Greenspan "ought" to be
- How the speculative mania for John Laws Compagnie des Indes in the early eighteenth century presaged the dot.com stock craze
- How the "Aging of the West" is more likely to affect stock prices in the years to come than fiscal policy
As it reveals the hazards of democratic consumer capitalism and the financial follies of history, Financial Reckoning Day warns that depressions are not necessarily a thing of the past. And thats why its so vital to have an essential, wide-angle resource like this on hand . . . to get you through the current crunchand put profits back in your portfolio.
Top customer reviews
The stock market does not go up year after year, sooner or later there will be some down years. But once people get used to double digit stock returns, they expect them to continue and adjust their spending accordingly.
Stock price growth is dependent on earnings growth, which requires new products and investment. Financial engineering and cost cutting only work in the short run. Managing earnings on a quarterly basis is a sure-fire way to discourage long-term strategic moves.
Investment must come from savings, which represents foregone consumption. If the central monetary authority tries to compensate for inadequate savings by creating too much money, the currency will lose value rather than supporting the creation of wealth.
Some theorists see the Great Depression as the result of not resorting to deficit spending quickly enough. Others blame the failure to create enough money quickly enough. Neither view is sound, per Bonner and Wiggins, because once the economic situation (which started as a speculative boom) got out of hand the government was powerless to correct it.
Similarly, the Japanese government drove interest rates down to virtually zero and engaged in radical deficit spending in the 1990s. Neither tactic cured a prolonged depression in that country.
And guess what, the U.S. seems to be headed for another prolonged depression, which started with a stock market bust around the turn of the century and will go on to a housing bust, etc. The timing is apparently running a few years behind the depression in Japan because the postwar baby boom lasted longer here than there. In recognition that things often turn out differently than expected, however, we will not know for sure what is coming until it happens.
The arguments are well crafted and backed by plenty of historical examples, but the authors' fatalistic tone is a bit hard to take. It would be nice to see some suggestions as to how economic disaster could be avoided. Also, with all due respect, I never did consider gold to be an attractive long-term investment.
Somehow they missed out that commodities would be a quick flash in the pan and quickly fall to seek out new lows. It appears that is where we are today. Now we have the govt. trying to bailout the Big 3 auto companies after bailing out most of Wall Street.
They were correct in their prediction of inflation picking up steam which is at the point where the economy is today. With all the govt. spending, world wide, we will see that almost every govt. will have a problem with inflation. Who wins with inflation? Only those that own real assets, or those few that had the foresight to start buying gold and silver years ago when they were much cheaper than they are now.
I have a lot of admiration for the two authors. They have exposed the Bush administration for the big spenders they are in contrast to the fiscal conservatives they claimed to be when they ran for office a long 8 years ago.
I have no doubt that the Obama administration will continue down the same path of big govt. spending in an effort to stimulate the economy. This will be done even at the expense of the downfall of the value of our currency. There is no doubt in my mind that the US dollar will lose its status as the reserve currency in the world. What will replace it, is beyond my area of expertise. I do suspect that it will be a currency that is somehow linked to gold. I have a strong feeling that while the US govt. will strongly push for a common currency with Canada and Mexico, "the Amero", China and the Saudis might have other ideas. Canada just may want to join in with China and the Saudis since they have an abundance of oil and gold potentially making them a powerhouse if there is an economic shuffle of power. Deegan Peter
I found little in the book to help my short term forecasting of equity and bond prices, and as for long term forecasting, most of the arguments have applied since 1970 just to a lesser extent.
The best part of the book for me, and what made it worth far more than the cost was the discussion of "The Hard Math of Demography". This lays out what the expected results of a younger and older demographic population are, from a financial and military point of view. Although Japan has had a far greater percentage change in population than the US and is thus a more extreme case, the macro economic case made for decreased consumption appeared to be a possible outcome.
Most recent customer reviews
There isn't any originality in his thoughts.Read more
newsletters and writing an ocassional book such as this one.Read more