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Crash Proof
Book

Crash Proof

How to Profit from the Coming Economic Collapse

Peter D. Schiff and John Downes
Wiley, 2007
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8

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Recommendation

Contrarian investor Peter D. Schiff isn’t just a bear. He’s a sky-is-falling, bury-the-Krugerrands-in-the-backyard bear. Writing with John Downes, Schiff argues that the U.S. economy is going to hell, and that clueless consumers, opportunistic Wall Streeters and pandering politicians are carrying the handbasket. Schiff’s screeching tone is a bit grating – until you realize that many of his predictions have proven accurate. That doesn’t mean you shouldn’t take him with a grain of salt, but this book was published in 2007, and in mid-2008, Schiff’s forecasts of a weakening dollar, rising gold prices, a bursting real-estate bubble and strong foreign stock markets were spot-on. His pessimistic polemic could use more practical advice and less macroeconomic analysis, but still getAbstract recommends it to those who seek an alternative viewpoint.

Summary

The U.S. Economy: A Disaster in the Making

The American economy is on the brink of disastrous collapse. U.S. consumers refuse to save. And Wall Street doesn’t really want them to, since any dip in consumer confidence sends stock prices down. Meantime, the Federal Reserve inflates one bubble after another and politicians keep spending. The dollar is in a long decline. In the near future, another nation will overtake the U.S. as the world’s leading economic power. Wall Street and Washington say the economy is thriving. Yet the country is measuring its trade deficits and budget deficits in the hundreds of billions, and its national debt in trillions.

The U.S. is like a middle-class family whose breadwinner loses his job but keeps running up debt. Eventually, the family sees that borrowing can drive consumption only so long. Ultimately, the consumer must produce something and get paid, or insolvency looms. By the same token, the U.S. relies heavily on foreign governments and investors to finance its debt. If they lose faith in the U.S. as a debtor, the resulting monetary collapse will crush the average American’s wallet.

This dire outlook might surprise you, especially...

About the Authors

Peter D. Schiff is a veteran Wall Street forecaster and president of an investment company. A frequent guest on TV business shows, he is nicknamed “Dr. Doom” for his pessimistic forecasts. John Downes is the co-author of Beating the Dow and other business bestsellers.

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