The Great Depression of Debt: Survival Techniques for Every Investor
$13.03
| Author(s) | |
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| Format |
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| Pages |
339 |
| Published Date |
2009 |
The Great Depression of Debt takes a close look at today’s economy and offers a bleak prediction for its future. However, those positioned to handle dramatic shifts in consumer spending, the mortgage industry, and the stock market are at a great advantage. Author Warren Brussee offers insight into the coming economic situation and provides steps to prepare for it. For example, he recommends that savings be in Treasury Inflation Protected Securities until the stock market drops 73% from its 2004 level. Methods of determining when the stock market is again a good buy are defined, and different investment options are evaluated. Even during a depression, people will need to save for their future, and Brussee provides detailed charts that show retirement savings requirements.
Introduction:
A recession occurs when there is a significant decline in economic activity spread across more than a few months. This decline is shown in real GDP, real income, employment, industrial production, and wholesale-retail sales. When the recession becomes severe or long enough, it transitions into an economic depression. As I write this book in late 2008, all the measures of economic activity are declining, so we certainly qualify for a recession. And given the depth of the housing, mortgage, debt, and credit issues, we appear well on the way to a full-blown depression.
The U.S. economy began to slow in 2007, and the GDP went negative in the fourth quarter of 2007. Some people only look at the GDP (Gross Domestic Product) when determining whether we are in a recession/depression. However, the government’s definition of a recession includes many additional factors, such as unemployment. And, as mentioned earlier, a depression is just a severe and extended recession. In the Great Depression the GDP went down four years in a row starting in 1930; it then went up the next four years, down the next year, then up again as we entered World War II. But we generally consider the whole period of 1929 through 1940 a depression because of its severity, because unemployment stayed very high, and because other economic measures remained weak even during the years when the GDP was rising.
The start of the current recession/depression was delayed almost a year longer than I expected because people continued to do cash-out refinances on their homes well into 2007, even though homes had already begun to drop in price. However, this delay is only going to make the recession/depression worse because of the increased number of people with mortgages greater than the values of their homes. As I write, 10 percent of homeowners are upside down on their mortgages, and this is increasing at a relentless pace as homes continue to drop in value and more homes come into the market due to record foreclosures.
This, in turn, hurts all the credit markets as “mortgage walkers” abandon their homes, causing mortgage-backed securities to continue to lose value. In addition, an extra 1.5 million homes were built in response to the demand caused by the increased number of people able to buy houses based on foolish mortgages. These extra homes are now an albatross around the neck of the housing recovery. Home prices will continue to drop for years; and home building will be largely stagnant, driving related unemployment up. And, of course, all of this is in addition to the underlying problem that consumers have been spending more than their incomes, which is now reversing out of necessity. This reduced spending is causing a severe slowing of the economy, exacerbating the economic problems related to housing.
These problems are so severe that it will take until 2012 or 2013 before the economy bottoms out and our economy again begins to grow. In the meantime, the stock market will drop dramatically, unemployment will be over 15 percent, and the dollar will lose its position as lead currency. Our country will be humbled as it is forced to adapt to a far lower and simpler standard of living. Although the turnaround of the economy is likely to happen in approximately 2013, it will be somewhere around 2020 before our country’s economy fully recovers.
Contents:
- The Crazy Nineties
- The Debt Bubble
- Why Are the Good Times Ending and the Bubbles Breaking?
- Current Times Compared to 1929–1930
- What This Depression Will Be Like
- What Else May Deepen the Depression
- Could the Fed Have Stopped This Depression?
- Now That It Has Started, How Are We Going to Work Our Way Out of This Depression?
- Why the Stock Market Is Currently a Bad Investment
- When to Get Back Into the Stock Market
- Once You Are Back in the Stock Market
- How to Survive the Coming Depression
- Saving Before and During the Depression
- Retirement Savings Charts for People Planning to Retire in 15 to 40 Years
- I Want to Retire Soon. How Much Money Will I Need?
The Great Depression of Debt: Survival Techniques for Every Investor By Warren Brussee pdf
7 reviews for The Great Depression of Debt: Survival Techniques for Every Investor
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Alani Young (verified owner) –
For what it is worth, I found this book to be a must read. The author was also ahead of his time by pretty much predicting what is unfolding now in our economy.
If you are looking for a book to read about our economy this book is a great place to start.
Bruno Gentry (verified owner) –
Wow – how I wish there were more financial writers in the world such as Mr. Brussee! I read the first version of the book “Second Great Depression starting 2007 – 2020” and think that book along with this one are excellent sources of macro-economic thoughts about our economy.
One of the aspects that I truly enjoy is the author’s humble nature and willingness to be open to alternate views and alternate theories.
This book is a great read for anyone that is interested in the current financial turmoil. Bear in mind, the author originally wrote and predicted much of the current situation we’re in back in 2004 when the market was on it’s ride up. Everyone in our nation should read this book – if only to demystify the world of finance in terms of bringing the fundamental shifts back into focus for the longer-term focus.
Bottom line, whether you agree or disagree – the facts and data in the book tell a story in which the author has captured one of the most challenging aspects of our economy – debt.
Thank you Mr. Brussee for a fine book that has alerted those who have read your book. Good luck in your continued success!
Asher McLaughlin (verified owner) –
Wow – how I wish there were more financial writers in the world such as Mr. Brussee! I read the first version of the book “Second Great Depression starting 2007 – 2020” and think that book along with this one are excellent sources of macro-economic thoughts about our economy.
One of the aspects that I truly enjoy is the author’s humble nature and willingness to be open to alternate views and alternate theories.
This book is a great read for anyone that is interested in the current financial turmoil. Bear in mind, the author originally wrote and predicted much of the current situation we’re in back in 2004 when the market was on it’s ride up. Everyone in our nation should read this book – if only to demystify the world of finance in terms of bringing the fundamental shifts back into focus for the longer-term focus.
Bottom line, whether you agree or disagree – the facts and data in the book tell a story in which the author has captured one of the most challenging aspects of our economy – debt.
Thank you Mr. Brussee for a fine book that has alerted those who have read your book. Good luck in your continued success!
Jensen Delgado (verified owner) –
The author of this book predicted the current financial crisis and even called the date correctly, in the previous edition of this book (Second Great Depression). I read that book in 2007 and moved my money out of the market, much to the chagrin of a financial “expert” who was being paid by me at 1% of the funds in my account at that time. As part of his pitch for me to stay in the market, my advisor called into question my judgement for taking advice from a book. I checked the authors data at the time (it was sound), followed his advice and saved myself tens of thousands of dollars.
Regarding TIPS (TIP), the author believes that inflation will rear its ugly head soon and based on this belief suggests using them to protect against inflation while the market continues to go down. The author then gives specific information about exactly when he thinks it will be smart to re-enter the market in equities, again based on sound reasoning and data. This is why you need to buy his book. He knew when to get out… so I’m using this book along with other books and information so as to know how to survive as the market dives down and then profit once the market is safe again to get in.
Malaya Acosta (verified owner) –
I bought this book because it was written recently, with the current financial crisis in mind, and the author included what looked like useful data regarding retirement planning. Though I wouldn’t base my plan off the ideas in any one book, I’m open to ideas from many sources.
The story of how we got here isn’t new to anyone who reads these types of books. Armageddonomics comes in many varieties, and the first part of this book was not unlike many others. The author for the most part seems to be on track: dropping dollar value, declining GDP, troubling demographics, etc. But there are several places where he doesn’t connect the dots.
One one hand, he acknowledges the fundamental problem with our fiat money system and helicopter-drops of money that will inflate the currency beyond belief. But shortly thereafter, he dismisses gold as any kind of a hedge. Since the price of gold back in 1980 was nearly $2000 in todays dollars, and since we are nowhere near that level right now, you can forget all about gold as a worthwhile place to put your money. Eh?
Instead, he seems enamored with Treasury Inflationary Protection Securities (TIPS). Without fully explaining what these really are, he goes on ad nauseum about TIPS being the central part of your investment plan, since nothing else really seems worthwhile. Anyone looking at Treasury products and their low yields these days might wonder if the advice he wrote back in mid-April 2008 is still valid today.
Additionally, he goes on about the high costs of fuel (again, this book was written at the $147 dollar a barrel mayhem of last summer). He theorized that high fuel prices and a slow economy would be devastating, forgetting that a slow economy would also kill off demand for fuel. He tends to drink the alternative fuel kool-aid a bit too much, thinking it is some kind of panacea not only for our dependence upon foreign oil (it isn’t) but that it can also help rebuild our economy with job creation (it can’t).
Though the charts in the back of the book may be useful for forecasting ones retirement needs (assuming his data is accurate), the rest of the charts are not helpful and detract notably from the order and readability of the book. There are also, as many others noted, several obvious proofreading errors throughout the text.
Overall the book was off to a good start, but the author was inconsistent in his message and careless in his execution.
Stephanie Tanner (verified owner) –
This book attempts to summarize how they economy got into such bad shape (something which the author astutely predicted a few years ago). What will happen as a result of the Massive debt the country faces, and what you should do as an investor. These topics are of great interst to me so I was eager to read this book, but unfortunately it was a big disappointment. Specifically:
The Positiives:
1 Star for the author’s foresight in calling out the 2008 financial collapse a few years before it happened. If you had listened to him you’d be better off today.
1 Star for the 3rd part on when to invest in the stock market. His review of the historic Price to Dividend Ratio of the S&P 500 and how to allocate between TIPS and Stocks provided interesting perspective for potential buying and selling triggers as well as Asset Allocation preferences.
The Negatives:
1. The author needs to find a new editor, the book was rife with grammar errors, and 3 page mumblings that he calls chapters.
2. Including lots of graphs and charts is no substitute for thorough research. The author likes to make hyperbolic claims with subjective terms like Always, Never, Most, Sometimes etc. but he often fails to substantiate these terms with supporting data.
3. The author is too quick to dismiss the many deflationary tendencies there are in the global economy right now and assumes that we will have rampant inflation in the near future. To be fair this is not just his short coming but in general Economic and Investment books are treating the inflation – deflation debate as a black and white either or question when what we really need is a book that asks what are the inflationary and deflationary forces at work in the global Economy and what scenarios could play out as a result?
On the Deflationary side you have:
Excess Manufacturing capacity globally.
The Deleveraging of a multi-year credit bubble
The Baby boom Generation having passed its peak spending age of 54.
And Globalization and the Internet (which allowed me to by this book for $.99 plush shipping and handling.
On the Inflationary side you have:
Commodity Scarcity if Developing Markets Commodity Hunger outstrips the ability to increase supply
Quantitative Easing by Central Banks around the Globe to stimulate the falling aggregate demand in their home countries.
So what will be the end result of all of this? I do not know but I’m hoping to find the book that treats these matters as interconnected forces, rather than picking a side and ignoring half of them. And then talks about how they could play out, what investors can be on the look out for, and where they should put their money.
For the deflationary argument due to boomer aging, I can recommend Harry Dent the Great Depression Ahead. For the inflation due to Oil Scarcity I can recommend Leeb’s The Oil Factor, if anybody has come across a book that has a more holistic look to all of the above I would be grateful if you could provide the recommendation.
Atlas Hensley (verified owner) –
This is a refreshingly good book. While the title may sound alarmist – the author has a refreshingly down to earth approach to the current crisis. Yes, things are bad but he provides easy to understand rationale for his position that a depression of debt is upon us while also presenting clear no-frills suggestions of how to take precautionary measures.
Best of all – unlike so many doom and gloom types in the media – the author is not advocating filling a cellar with cans of tuna, arming yourself and other “end of the world as we know it” scenario’s. In fact, I suspect some of the negative reviews of this book come from those seeking MORE doom and gloom or those that simply cannot fathom taking easy to implement steps to protect their financial future like purchasing TIPS. If it were shrouded in Rambo terms then perhaps it would be more appealing to a certain part of the society while it may appeal more to another segment if it consisted of some sexy sounding acronym promising a future fortune…unfortunately, TIPS aren’t sexy nor are they likely to entice the likes of the survivalist group. On the other hand, they – and other suggestions throughout the book – ARE within the realm of most households to implement.
One final consdieration, the book has been criticized by some for having “too many” charts and tables…while I can understand why they may not appeal to everyone this is actually one of the most desirable aspects of teh book since it keeps me from having to do it myself. The numbers speak for themselves.
While I may not personally agree with each and every aspect of the book, it is worth the time to read and consider; unlike 90 percent of the trash out there, this book isn’t selling any software, investment group or other overpriced mechanism to part you from your money. Plain, simple info with practical guidelines the majority of households can put into practice.