James Rickards

I picked this book up on a whim when I was at Barnes and Noble. This seems to be a cautionary tale on how the economy not only in the United States but also globally can go wrong. Rickards offers some general investment ideas on how investors can protect themselves. Very interesting read.

Aftermath notes:

By purchasing long-term treasury securities, the Fed lowered their total return and made them less attractive to investors. In turn, this made stocks and real estate more attractive on a relative basis.

Mercantilism makes China the fastest growing major economy, while free trade leaves the United States to languish with depression level growth.

The debt to GDP ratio is merely national debt divided by national output calculated in the form of gross domestic product, or GDP.

During the Reagan years, the US debt to GDP ratio grew from 32.5% to 53.1% the highest level seen since the early 1960s.

Clinton presided over the longest peacetime economic expansion in US history. At the end of Clinton's presidency, he even produced a small budget surplus for the first time since 1969.

The combination of tax cuts and increased spending signaled the return of trillion dollar annual deficits that will soon push the US debt to GDP ratio from my 105% to 115% (trump)

1. Reduce exposure to high valuation, High growth stocks and technology, media and advertising ( Facebook, Apple, Amazon, Netflix and Google)

2. Allocate part of one's portfolio to sectors that perform well in low growth and deflationary environments, including utilities, 10 year US treasury notes, and high quality municipal bonds.

3. Increase your allocation to cash.

I have yet to meet a hedge fund billionaire, and I've met many, who does not have a large personal allocation to physical gold.

The main difference between today's market crashes and past market crashes is automation––automation trading.

Today, over 15% of US debt is owed to foreign countries including China, Taiwan, and Japan.

The GBI, also called universal basic income, UBI or simply basic income is an old idea offered as a new remedy for an economy that produces too few jobs with decent wages. The idea is strikingly simple. Government will pay every citizen a basic income from public resources. It is paid without any requirement for work and regardless of any other income.

How does an investor prepare for a world that could be inflationary or deflationary? This solution is called the barbell portfolio. On one side of the barbell you have inflation protection consisting of gold, silver, land, and other hard assets. On the other side of the barbell you have deflation protection consisting of 10 year treasury notes, utility stocks, and technology companies that continually reduce costs. Connecting the two sides of the barbell it's an allocation of cash. The cash reduces the overall volatility of the portfolio and provides optionality to pivot towards inflation or deflation protection if either becomes dominant. … (más)

Explores the currency valuations and their relationship to trade deficits and import / exports; especially applied to the States and China. Although published in 2011, the material is still relevant - especially in the exploration of past financial crisis such the financial Panic of 2008 and the Great Depression. It explores the Classical Gold Standard prior to Word War I, the Gold Exchange Standard during the Intra-War years (1920s), the Bretton Woods system post World War II, and the current Fiat standard post Nixon's 1971 Gold shock.

Although Cryptocurrency was just coming into existence, and thus not covered, one can certainly see how it might fit into the broader discussion of a new global currency. Mr. Rickards also covers the IMF, the World Bank, and SDRs.

Still a recommended read in the 2020s.… (más)