The Book: "Aftershock" ... Opinions?

Discussion in 'Bullion Investing' started by Billincolo, Apr 8, 2010.

  1. Billincolo

    Billincolo Senior Member

    For those who have read this entire book at this point ...

    Do you share or buy into the authors' predictions and assessments of the direction of our national and the international economies, and how they will affect us?

    Do you buy their prediction about gold and their suggestion to buy it?

    I ask because their reasoning is plausible to me and it's difficult to decide whether they are accurate or are more reflective of my avatar's attitude ...

    Thanks -- Bill
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  3. Zuhara

    Zuhara Junior Member

    I haven't read the book, but I would guess that if you read it, it probably struck some chord with you (or your avatar :) ). I have two reactions to this kind of literature: the first is, that there is money to be made out of fear. The second is that even so, many responsible, non-hysterical people feel that some investment in PMs is prudent as a hedge against currency/political disasters. A sort of insurance policy. One has to make up their own mind, but personally, the insurance policy approach works for me.

    But it depends on your age and situation. Especially for young people, I think counting on disaster or worrying about it too much is often a waste of time and money. Younger people will likely do better if they invest in education or acquiring knowledge or skill, or starting a business, or even travel, than putting it towards a heap of shiny metal that sits around doing nothing. If you are older, with an established life and savings to protect, it may be a different story.

    I think sunflower said here that one shouldn't invest more than one would be comfortable seeing go down to half its value. Sounds like a good rule to me.
    .
  4. Rono

    Rono Senior Member

    Hi Bill,

    I really agree with zuhara. I'm of the school that believes everyone should have some core investment in precious metals - say 3-5%. More than that is speculation - which is fine, but be aware of the difference. The core should be in real stuff that you can hold in your hand.

    Otherwise, most of these EOTWAWKI books would have us all living in a cabin offgrid and eating what we harvested. While we'd probably be a lot healthier, it's probably going to upset the family. Besides, there are easier and probably superior ways of preparing for the end.

    First of all, with any risk management plan you need to balance out the costs and benefits of protection or no protection.

    What are the potential costs to you of Event A happening if you prepare - if you don't. What are they if if does NOT occur - if you prepare - if you don't. Then toss in a the chances of Event A happening and you can run the numbers.

    For example, I see the chances of some sort of financial meltdown happening are 25%. Pretty high but not dire. However, what will that cost ME if it does occur? Pretty nasty if I don't prepare at all. How can I prepare to minimize that costs should it occur. How much will it cost me to prepare?

    Now what if it does NOT occur? If I prepared it would be the cost of my preparation. If I didn't prepare I would avoid this cost.

    In my case, I see a clear benefit to preparing to some degree with an eye on the costs of that preparation. This is not because some meltdown is likely as much as if one happens, the cost is potentially high.

    However, I'm not moving to the woods. I own a couple of acres and can grow a lot of my own food if I have to. This will be increasing each year. I also am starting to landscape with edible stuff. I'm retiring but have my resume' in order and am still taking classes. I'm engaged at many levels in my community.

    As for money, a couple of years back I read a quote from the elder Baron Rothschild saying that you should have 1/3 of your wealth in securities, 1/3 in real estate and 1/3 in rare art. [sub rare coins and bullion for the last category]. At the time I ran our numbers and we were 90/8/2. We're now at 70/20/10. I'm shooting for 50/30/20 or better.

    and so it goes,

    rono
  5. Billincolo

    Billincolo Senior Member

    It sounds as though neither of you have read the book.

    I was looking for people who had read the book.

    BTW, I'm an "old" grasshopper, at 62, and don't need random opinions on "EOTWAWKI books," as you call them. This, also BTW, is not one of those.

    Bill
  6. se-collectibles

    se-collectibles Collector Extraordinaire

    I hadn't heard of the book, but I just read a few dozen customer reviews on various book selling websites.

    I won't be buying it. Although it doesn't appear to be a TEOTWAWKI book, it does appear to be "if you don't listen to us, you're gonna regret it because we've predicted everything that's happened so far" book.

    Even so, most of the reviews said words to the effect of it's a good read.
  7. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    I haven't read the book, but probably will. However, I read some customer reviews on Amazon to get a feel for it. Since you are only looking for opinions from people who have read the book, I won't say that it appears the authors are largely on target with their analysis of the present situation and probable outcome from current economic circumstances based on my own analysis and expectations. I don't know what they suggest to protect wealth since it is enormously difficult to protect yourself from an imploding economy, even with gold and silver, because it is impossible to predict changes to the legal system that accompany economic panic. But I won't say any of this because I haven't read the book yet.
  8. Zuhara

    Zuhara Junior Member

    As it happens, I was assuming you were older, as I am myself. I said what I did because I find that these Internet discussions about the end of the world tend to be dominated by the concerns of us older people--that is, with wealth protection. Younger people have different, and probably better things to worry about.
  9. Rono

    Rono Senior Member

    Sorry, Bill,

    Are you talking about the book about protecting your assets in the next global meltdown? I have not read it but have read many like it and many other articles that are saying similar things. I believe them. I'm preparing myself for that sort of eventuality. Will it happen? I don't know.

    There was just a nasty article in the Rolling Stone:

    http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle

    Or check out the silverbearcafe.com

    Good luck - and all my preparations for this sort of thing are still in my previous response.

    rono

  10. Billincolo

    Billincolo Senior Member

    I'll give you guys my opinion of the book, and you can agree or disagree if interested. They support gold as an investment, by the way, so this is within the area of this forum.

    The authors published a previous book titled America's Bubble Economy, in which they swam against the tide of experts who were saying everything would be al right. It was in 2006, and the authors were right. We were, they said at that time, headed for a recession caused by the popping of various "bubbles," in real estate, discretionary spending, stock market, and private debt. While others were missing the bubble-like nature of those areas of the economy, these guys weren't.

    In this present book, they talk about what has happened with those bubbles, and examine the two remaining bubbles -- the biggest of all. One is the dollar bubble, the other, the government debt bubble.

    Their reputation -- especially including that of the main author, David Weidemer -- is well established as accurate forecasters.

    Their recommendations are not outside the purview of this forum, since they recommend buying and holding gold. They don't predict a specific price point or timing, but they hold the view that the trend, when the dollar and gov't debt bubble pops (and the US Mint is paying lots of overtime) is very high for gold -- personally held gold bullion, not ETF's or mining stocks.

    There's more, and their non-political treatment of the economic future they see in the next 1-5 years is well supported. (The only subject they passingly addressed, which I know well enough to hold a factually supportable opinion on, was gun control: They want more of it, so they clearly are capable of missing obvious facts supported by clear evidence in come cases.)

    Thanks for your input, all.

    Bill
  11. coleguy

    coleguy Coin Collector

    Sounds like an interesting book I may have to pick up. I do agree that the two biggest bubbles are still there, but I disagree with the notion that gold is a long term solution for investors trying to prepare for a bubble pop. Look at Argentina a decade ago. Government debt ruined their economy and essentially the country went bankrupt. Most national debt was erased. The currency was re-structured. If you had bought gold before that pop, you wouldnt have retained no more wealth than if you had held cash as a re-structuring of a monetary system after a financial meltdown would result in the currency retaining only it's last known value. The dollar isnt a bubble waiting to bust. It s a measure of something, like a weight. Debt, however, that is the scary one.
    Guy~
  12. Billincolo

    Billincolo Senior Member

    Coleguy --The "dollar bubble," as they call it, is well described in the text. I agree, the dollar is a measure of something, but it is overvalued based on various comparisons, and its value can fall, as it has recently against the Euro. When it falls even farther because of printing of too much currency, that's the "pop" they refer to.

    The book is worth reading. For a comparison of the authors' predictions/accuracy, go to their website: www.theforesightgroupinc.com , where they have a grid comparing their predictions to the talking heads on TV.

    Also, at www.aftershockeconomy.com , their main website, they have more info.

    I have no interest in their success and I am in no way connected to them; I just thought their theories were intriguing because nobody else was saying the same things.

    Bill
  13. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    I think this statement is wrong, but can you clarify what you mean?
  14. coleguy

    coleguy Coin Collector

    When a country re-structures it's monetary system, even if debts are erased, their currency cant just reset to pre collapse levels. Thats what I meant. So $1000 of gold bought during a collapse would not garner a pre collapse worth of investment...you'd still have $1000 in gold. Thats all I meant.
    Guy~
  15. Billincolo

    Billincolo Senior Member

    Guy: Yes, but ...

    Start with your entire fortune of $1000 in currency in one hand, and your investment of $1000 in gold in the other hand.

    Imagine that the government devalues your currency 50%, and that $1000 in currency is suddenly only worth $500 in buying power. Now, you will need $2000 to buy what your $1000 would buy pre-devaluation. But, you still only have your $1000 in currency, so you can only buy half as much as before.

    Your gold, which was worth $1000 before the currency devaluation, is not devalued. It is now worth $2000 in terms of the new dollars. Its value has not been diminished by the dollar devaluation.

    So, what you said is correct in a way, but the part that was left out is that the gold holds its value as you said, but the currency loses value, and, you still only have the currency you started with.

    At least, that's the way I understand it ...
    Bill
  16. coleguy

    coleguy Coin Collector

    I agree, Bill. I suppose I should have clarified that 1000 was assuming people are buying in an already depressed market. Thats why I think people who buy gold now, when the dollar is so low, will never recoup their money. Had they bought when the dollar was strong, thats another story. Like you said, gold pretty much stays stable as currencies and the amount it takes to buy it moves. Still, the subject has me interested in finding that book.
    Guy~
  17. Billincolo

    Billincolo Senior Member

    Thanks Guy -- Yeah, it's a good book. But, the authors stop short of saying anything at all about the value they project for gold in the future. They do use the term "stratospheric" in relation to its future value, since they see it as one more big bubble -- a huge one that we'll have to sell out of at the right time.

    BIll
  18. Zuhara

    Zuhara Junior Member

    I agree that gold is not a terrific buy in USD terms at current prices :). But it depends on how much lower you think the US dollar could go. When they revalue SDRs in the fall, we may find that the US dollar is going to be reweighted. And if they want the dollar down at least another 40%, or if they "lose control" of this game at some point, you may still come out ahead if you have some of your assets out of the USD IMO.
  19. Zuhara

    Zuhara Junior Member

    Your plan seems sensible to me. Especially the engagement with learning and the community part. When I look at recent currency crises and economic collapses, people didn't go back to the Middle Ages, so I don't think we need to prepare for a return to feudalism, but decent food could get expensive, and being part of a community can be a big help for many reasons. As for moving to the woods, I agree... one of my grandfathers kept six families in fruit and vegetables out of his modest suburban backyard.

    Although who am I to disagree with Rothschild, I am guessing bullion would be better during a crisis than rare art, which I think might be difficult to sell. What a pity, because I'd have much more fun buying art than accumulating bullion...:). IIRC, didn't you once mention that foreign currencies were also a part of your plan?
  20. forextrading

    forextrading New Member

    As one of the few on this thread who have actually read the book, I thought I'd weigh in. I agree that this is not your typical ITEOTWAWKI kind of book.

    FYI, I'm not a permabear. In fact, I'm naturally an optimist and have discounted the bullish potential of gold until recently, when I started understanding the fundamentals at work that are going to devalue our currency.

    I really like a lot of the book...especially through Chapter 7...and agree with many, but not all, of the premises and conclusions of the authors.

    THINGS I AGREE WITH

    - The recent real estate boom was a bubble that has not yet completely deflated. The time to buy real estate as an investment is not here yet.
    - Stocks are currently in a bubble that have not yet deflated to reasonable levels. There is either a major crash or a consistent bear market ahead...or both.
    - China is a HUGE bubble that will deflate BIG TIME soon...it is already starting. I've long believed that, and recent events confirm it. Back in the 80's, everyone thought Japan would crush the U.S. This time, everyone put too much faith (and investment) in China, creating a bubble of overinvestment. Read this: http://bit.ly/bzIs05
    - The dollar is deflating in value and will continue to do so. The European economy is not in a whole lot better shape, but the Euro and other currencies, due to supply and demand, will increase a lot vs. the dollar. I am bullish on the Euro for that reason...not because I think European economists are any better than U.S. economists. It's just that the U.S. burden of debt is about to collapse on us, and the Euro will benefit.
    - The government debt situation is the most gargantuan bubble of all, and when it gets popped, the economy will be "reset" a long way down from where we're at right now.
    - All of the above bubbles will drive people toward gold…myself included. However, the fundamental forces at play will also create a gold bubble that will at some point pop. This is probably 3 to 5 years or more away. Until then, I'm bullish on gold.

    THINGS I DISAGREE WITH

    - The authors seem to have respect for Keynesian economic philosophies, and I do not. I believe the people are the source of wealth, and government cannot efficiently manage it or create it. They can only destroy it. They may at times succeed in distorting the markets to pick winners and losers, but it will usually end badly.
    - The authors give no moral blame to government for causing the above bubbles, yet all of them are due to government intervention in the economy, IMO.
    - The authors like FDR. I find it unbelievable that anyone with any historical knowledge whatsoever can like FDR.
    - The authors take a nonchalant view of our supposed predestined "evolution" toward an international currency managed an international equivalent of the Federal Reserve. They suggest that this is a given, that there's nothing we can do to avoid it...nor should we. I totally disagree. I believe our national sovereignty is crucial to surviving the collapse of the dollar and the global economy in general. We will not get out of this by banding together and singing Cum Bay Ya. We will get out of it by competing once again to earn the investments of the world in our economy.

    --Kevin

    http://stocktwits.com/forextrading
  21. klatter4

    klatter4 New Member

    Bill,

    I read the book and have been preparing for a major catastrophe since I first learned of peak oil. I am 59 almost 60 and am getting ready to retire. Fortunately I have amassed a small fortune investing in energy and lately in gold. I am getting out of the collectables such as non-gold coins because I believed they will be dirt cheap after the aftershock. I am buying Canadian gold coins because they are supported by the Canadian goverment - I am not sure the US will allow gold after the collapse. I believe the Canadian currency will remain strong because Canada has no major debt. I am a physicist, well educated, married and living a conventional life and not a kook by any stretch of the immagination. I am stunned that our goverment has ignored these problems for so long but then maintaining the status quo has been the buzz word for the age of excess. Love to talk with you more about this. edited

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