Anyone looking for a well-written, concise description of the economic underpinnings of the financial crisis would should spend some time over the holidays reading Peter Shiff’s “Crash Proof: How to Profit from the Coming Economic Collapse” [link to Amazon]. Shiff’s book was published not very long ago – in 2007 – but before this year he had often jokingly been referred to as ‘Dr. Doom’ or Chicken Little. Nobody is joking anymore.
In a straightforward writing style that any non-finance person can understand, Shiff walks through how the policies of the Federal Reserve, trade deficit, lack of savings, and other factors lead to an economic bubble that started to unravel this year.
Shiff warns of very tough times ahead, with a decline in the dollar and stagflation contributing to a painful period of sacrifice as our economy is rebuilt. He gives his views on the best ways to invest during this period – foreign currency, developed international markets and commodities; all of which are intended to profit from what he believes will be a long-term decline in the US dollar.
Shiff’s writing style isn’t for everyone – he is blunt and pretty cynical. He also doesn’t give you a warm fuzzy about our economic future and he pimps his own firm a little too much. But if you want to understand some the macroeconomic reasons the markets have tanked this year so you can protect yourself and improve your odds at success in the future, it’s required reading.
