the_ultimate_depression_survival_guide4

The Ultimate Depression Survival Guide:

Protect Your Savings, Boost Your Income, and Grow Wealthy Even in the Worst of Times

On the road to $1M rating:

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As you would expect from somebody who thinks we’re experiencing the “Second Great Depression” of modern times, Martin Weiss is more than a little angry with the people who got us into this mess. He starts the book with a description of the doomsday scenario that awaits us in the aftermath of the current financial crisis. And while he describes, he rants at the list of those responsible for it:

  • The US Government, who have thrown good money after bad in an effort to bail out banks, brokerage firms, insurers, mortgage brokers, automakers, and any other company who could just about argue that they are “essential” for the economy or “too big to fail”. The result? According to Weiss, sixteen times our biggest-ever federal deficit.

  • Alan Greenspan, who, by keeping interest rates artificially low in the firs half of the 2000’s, contributed to the subsequent consumption spree, housing bubble, and lowest household saving rates ever seen.

  • The Federal Reserve and the Treasury Department, who first decided to let Lehman Brothers fail, then backtracked in the face of the ensuing panic and threw themselves into bailing out the entire financial system with the Troubled Asset Relief Program (TARP).

  • The “Government-bred monopolies, corruption, fraud, and cover-ups” that stained every part of the financial system, from Freddy Mac and Fannie Mae to private mortgage lenders, rating agencies, banks, and large companies’ CEOs.

  • Consumers, who were willing participants in the massive money illusion that followed the outrageous stock-market returns on the 90’s and the housing bubble and endless supply of cheap credit of the 2000’s. We convinced ourselves that a lifestyle based on raiding our homes’ equity and maxing out our credit cards was not only reasonable, but also sustainable in the long run.

The list is longer and more detailed, but I wouldn’t have space here to go through it all. Suffice it to say that every single one of corporate America’s big shots is named in the book at some point or another.

No bad for an introduction, especially one that’s intended to convince the reader that a depression is inevitable, and that this particular book holds the secret of how to benefit from it. But the whole description of how we got into this mess doesn’t come across as particularly far-fetched. I found it often illuminating, and suspect that the reality may be even darker than Weiss suggests.

The rest of the book covers methods to protect or even increase your income during an economic downturn. I particularly liked the fact that it’s full of practical tips and helpful resources.

For example, you think your money is not secure on a commercial bank? Weiss guides you through the steps to open an account with the US Treasury Department. You think Wall Street is going to go down in the second part of the year? You find a list of more than 50 index and sector inverse ETFs, whose value increases when the value of the underlying index or sector plunges. Many books wouldn’t care to explain inverse ETFs work, let alone give compile for you a catalogue of ticker symbols. I appreciated the unusual level of detail.

So while I’m still not convinced about the imminence of a depression that “threatens to rip through our lives with the force of a hurricane”, I prefer to be cautious than sorry, and the book taught me a couple of tricks to hedge my savings against economic downturns. Even if you’re convinced that a bear market is just around the corner, there’s no harm in being prepared for the opposite, and this book is the place to learn how.

TALKBACK

  • Do you agree with Martin Weiss that the current crisis will be followed by a long period of depression?

  • Would you bet on stock prices going down in the second half of the year by buying inverse ETFs?

PLEASE LEAVE YOUR COMMENT HERE

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