World Famous Comics: The Demise of the Dollar... and Why It's Great For Your Investments (Demise of the Dollar & Why It's Even Better for Your Investments)
The Demise of the Dollar... and Why It's Great For Your Investments (Demise of the Dollar & Why It's Even Better for Your Investments)
By: Addison Wiggin Publisher: Wiley Average Rating: Binding: Paperback Label: Wiley Number of Items: 1 Number of Pages: 218 Publication Date: August 08, 2005
Product Description: As the dollar continues to weaken against other currencies, it is increasingly clear that this event will have a significant impact on investors and consumers around the world. Never before has the "reserve currency of the world" been so burdened by debt or suffered from such serious structural imbalances. The Demise of the Dollar . . . And Why It’s Great for Your Investments examines the reasons for the dollar’s current slide and offers an up-close look at the Federal Reserve’s attempts to "manage" the dollar’s value. Filled with in-depth insights, wry wit, and sound advice, this intriguing text offers an inside glimpse of the reality of today’s dollar and its impact on the world’s economies as well as readers’ personal portfolios.
Amazon.com Review: "Our long history of economic power and wealth is being eroded from within," writes Addison Wiggin, and the result will be reduced foreign investment, slow foreign demand for U.S. goods, and unfavorable currency exchange rates. A heavy debt burden, the trade deficit, and structural imbalances have created an unstable dollar bubble, and according to Wiggin, it's not a matter of if the bubble will burst, but when. That's the bad news. The good news is that hidden investment opportunities are waiting behind the weakening dollar. In The Demise of the Dollar… and Why It's Great for Your Investments Wiggin offers advice to readers looking to capitalize on this reality; specifically, he encourages investing in precious metals, tangible resources, and some select foreign markets.
Along with investment advice, Wiggin provides a brief history of government and consumer spending habits and how they have changed over the past 200 years. In clear language, he states the reasons for the dollar's decline, and provides explanations of the forces behind inflation, modern corporate accounting and adjustment schemes, the parallels between corporate failures and government policies, the implications of the national debt and deficit spending, and the distinctions between productive and consumptive debt. He also discusses how foreign countries, particularly China, are ultimately in control of the U.S.'s economic fate due to the staggering amount of credit they have extended. Wiggin is highly critical of Federal Reserve Chairman Alan Greenspan's policies, particularly the massive shift from production to credit that he has espoused, and calls into question his efforts to manage the dollar's value. Of course, Greenspan was not working alone--every president since Ronald Reagan has embraced his views. Written for lay readers, The Demise of the Dollar offers a practical analysis of what the "twilight of the Great Dollar Standard Era" may bring. --Shawn Carkonen
Sound Directional Advice on Investing After the revised version of this book came out recently, I thought it would be valuable to go back and read the 2005 version when the dollar was mid-way through its slide to the year 2008. As I checked the book out of the library, I had to laugh when the librarian pointed to the subtitle and said, "How does he think that a lower dollar is good for investments?" I responded, "I'm sure he's not talking about spending $1,000 a night for a hotel room in London."
Well, that's the point. He doesn't say much on why a lower dollar is profitable, mostly to help you defend against dollar declines with positions in commodities where supply and demand are out of balance, but the advice was directionally sound for 2005:
1. Buy oil service stocks and ETFs.
2. Buy foreign stocks and ETFs tied to commodity suppliers to China based in places like Australia.
3. Buy commodities through shares in energy and commodity sectors (oil and gas, precious metals, steel making).
4. Use options to take positions rather than take direct ownership (this didn't work well in all time periods).
5. Buy gold.
6. Buy dollar puts.
7. Buy Euro calls.
Aside from being pretty aggressive in favoring options over unleveraged positions, this advice would have been profitable.
Will the advice be profitable in the future? I suggest you read the revised version to see what you think.
The bulk of the book explains that the dollar is a fiat currency, rather than linked to continuing value, the effect of deficits and excess borrowing on its value, and the risk in the housing market. You can skip those parts because you've been reading about them in the news this year. The part that describes rapid rises in oil prices is more relevant to making money, as opposed to avoiding losses.
3.5 stars-Yes.Massive banker financed speculation is the problem The author has correctly incorporated into his analysis what the basic problem has been in the USA since Paul Volcker became Federal Reserve Board Chairman in Oct.,1979-(a)bank speculation,(b) massive loans by banks to finance speculation by others and(c)the deregulation of the financial markets that has allowed the creation of a very powerful "shadow" banking system that is subject to NO regulation and and thrives on speculative finance.Unfortunately,he does not emphasize this problem enough.He does not seem to know that Adam Smith warned about this problem repeatedly in The Wealth of Nations(1776;Modern Library(Cannan) edition,pp.290-340,especially pp.339-340)when he warned that loans to speculators "waste and destroy " the savings that must be transformed intertemporally into investment spending in order to maintain a healthy,growing economy.Greenspan and Bernanke have continued to follow the Volcker approach -supporting continued banker speculation ane bubble creation. The solution,however,is not to return to the gold standard and short the dollar(this is happening right now as a result of Ben Bernanke's 1 trillion dollar bank-stock market bailout that commenced in late August,2007 and continued through May,2008.THe result has been to create a giant bubble in oil and other commodities that is leading to massive speculative price rises that is undermining Second and Third world countries abiltiy to feed its populations even a minimum ,basic diet.)This would only make the situation worse.The solution is to cut off bank loans to speculators and prevent banks from speculating themselves.
Interesting subject, a little repetitive I agree with some reviewers that the book is a little repetitive in the arguments. Despite of that I think this book helps to provide the big picture and all the factors involved in the Dollar depreciation, including some tips about investment. The problem per se is very difficult to deal with especially now with the United States entering a recession and the FED cutting interest rates, measures that do not help the dollar. But now, the important thing is to avoid the United States to enter a deep recession and to lessen the effects of this problem -- it is not the right time to fix this debt matter.
The big question for me is how long this consuming apetite can be sustained without taking measures to reverse the trade deficit problem. The brake will have to be taken some time in the future and I only hope it could be made in a way that the world economy is prepared and, wishfully, more decoupled from the United States economy. It is time for changes and new adjustment, and other economies of the world cannot look at the problem without taking precaution measures ... we all depend on the dollar.
The Demise of the Dollar This was a fairly good history review but did not discuss anything profound as to why a weak dollar is good for investments. An easy read but not impressive.
More Actionable Advice would improve the book The author goes to great lengths, quite successfully, to explain why the country finds itself with the challenges that it does. Very educational. Very important.
However, more actionable advice about what to do about this problem would improve the book immensely. How should you evaluate, in greater detail, the various Gold ETF's, the various gold mining companies, and determine when you were purchasing these sectors/companies at P/E's that increased your overall risk rather than lowering it.
In other words, how do you know you are buying the recommended investments at the proper time, vs when they are overblown in valuations? Another two chapters on that would have helped.
Still the history and background is interesting, and worth a read.
Anything Goes Trivia
Megaton Man
Tailipoe
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