There are few books I would term “life defining”. For instance, Ayn Rand’s Atlas Shrugged made me a capitalist for life while J D Salinger’s Catcher In The Rye and Harper Lee’s To Kill A Mockingbird helped me grow in other ways. A recent book that helped define my worldview was Crash Proof 2.0: How To Profit From The Economic Collapse (2009) written by Peter D Schiff along with John Downes.
Before I read this book (for the first time in 2011), I was under the impression that the US was a powerful country, strongly committed to the rules of capitalism, but this book showed me that present-day America is nothing like the America of old. It exposed the underlying rot that had set into America’s foundations and how it had resulted in the 2008 crisis.
Schiff accurately, in 2007, predicted the 2008 crisis, in the earlier edition of this book, called Crash Proof. In the second edition, Crash Proof 2.0, he offers his updates after the crash and it is uncanny how right he was. There was nothing magical about his prediction of the crisis. He was merely following the principles of Austrian economics to the letter.
In this book, he clearly states that the belief that the US has transitioned from a manufacturing-led economy to a services-led economy is false. The US was forced out of manufacturing by other countries offering cheap labor and hence had to fall back on services. This resulted in the large trade deficits that the US suffers from even now.
Schiff uses telling parables to illustrate the paradoxes in the world economy. Far from being the “engine of growth” that many assume it to be, Schiff says that the US is a “caboose” that is halting the “gravy train”. And when the US economy was being called a “Goldilocks” economy, the mainstream economists were embracing the wrong fairy tale. It was instead a “Humpty Dumpty” economy and now Humpty Dumpty has fallen off the wall and the government officials are scrambling to put the pieces together!
I have been closely following Schiff in many of his YouTube videos and apparently he has gotten some of his calls wrong. He predicted hyperinflation in the US, a return to the gold standard, and gold at US$ 5000. That the facts do not support this is no disparagement of Schiff. There is a very strong world-wide confidence in the US dollar but, when this fades away, Schiff may yet be proven right in many ways.
Before I read this book (for the first time in 2011), I was under the impression that the US was a powerful country, strongly committed to the rules of capitalism, but this book showed me that present-day America is nothing like the America of old. It exposed the underlying rot that had set into America’s foundations and how it had resulted in the 2008 crisis.
Schiff accurately, in 2007, predicted the 2008 crisis, in the earlier edition of this book, called Crash Proof. In the second edition, Crash Proof 2.0, he offers his updates after the crash and it is uncanny how right he was. There was nothing magical about his prediction of the crisis. He was merely following the principles of Austrian economics to the letter.
In this book, he clearly states that the belief that the US has transitioned from a manufacturing-led economy to a services-led economy is false. The US was forced out of manufacturing by other countries offering cheap labor and hence had to fall back on services. This resulted in the large trade deficits that the US suffers from even now.
Schiff uses telling parables to illustrate the paradoxes in the world economy. Far from being the “engine of growth” that many assume it to be, Schiff says that the US is a “caboose” that is halting the “gravy train”. And when the US economy was being called a “Goldilocks” economy, the mainstream economists were embracing the wrong fairy tale. It was instead a “Humpty Dumpty” economy and now Humpty Dumpty has fallen off the wall and the government officials are scrambling to put the pieces together!
I have been closely following Schiff in many of his YouTube videos and apparently he has gotten some of his calls wrong. He predicted hyperinflation in the US, a return to the gold standard, and gold at US$ 5000. That the facts do not support this is no disparagement of Schiff. There is a very strong world-wide confidence in the US dollar but, when this fades away, Schiff may yet be proven right in many ways.
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