Anne Arundel County, Maryland
How to Profit from the Coming Economic Collapse
By Peter D. Schiff
Published by John Wiley & Sons, Inc.
Book Review by Brent Herrick - April 26, 2008
This book is about an investment approach for protecting yourself from financial ruin caused by the inflation of our money supply and the subsequent debasing of our currency.
First the author builds the case for how we have reached this point and then explains how to protect yourself from the worst of the possibilities.
Part of the crash proof philosophy is the concept that we Americans have consumed by borrowing rather than consumed by earning, and is the crux of the problem leading to our coming crash. We have lived the high life at the expense of the rest of the world and of future generations of Americans. When the bill comes due we will simply be unable to pay.
How will it come due? Asian countries that have taken worthless dollars to pay for their products will finally decide to take no more dollars and instead want to cash them in for U.S. assets or products available in the U.S. that will then be exported. When this happens, the United States will experience a sudden and amazing reduction in our standard of living, much like the British did after their empire crumbled. In our case, since the debt is so huge and our ability to earn our way out of it by manufacturing things is limited due to our loss of industry, we will all struggle to maintain anything near our previous way of life.
The last few chapters of the book outline investment approaches that Schiff recommends to protect your wealth against the predicted crash. Gold has a central place in the planning for safety. Various gold investments are discussed and recommended, but in particular, the idea of owning physical gold is foremost. Other means such as gold shares, mining shares, or having paying a company to hold physical gold for you is his idea of building a crash proof foundation.
Holding stocks that are foreign currency based is also another approach that the author recommends. Stocks that are denominated in more secure currencies will then be more likely to go up or maintain their value against domestic stock.
Saving pre-1982 pennies is one of my favorites. The author points out that they are now worth more than two cents in copper value. Pennies dated after 1982 are zinc pennies and are now actually worth a penny though when they were made they were of less value.
Look around you and see what is happening today. It may make sense to consider the recommendations of this author as a hedge against the risks current in our economy and therefore in your assets if they are all valued in dollars. Hard assets such as gold have already gone up drastically in the past few years as the new oil shocks and our latest bubble has collapsed, that being the Real Estate.
It is hard to predict exactly what the future portends, but going for safety in at least part of your savings is what this book recommends. Schiff’s arguments are reasonable and logical enough satisfy a prudent investor. I recommend this book as a great primer for anyone working toward a retirement and doesn’t want to end up like so many others did after investing their retirement saving in tech stocks at the height of that boom.
Disclaimer: Please consult a financial professional for your specific retirement objectives. The ideas presented here are for informational purposes only and do not represent legal or professional advice. Make any financial decisions at your own risk.
Reprinted with permission given by the reviewer: Brent Herrick
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