Crash Proof is not a Tarantino movie, but it's about as scary as the last one was (hint: plenty).
I've only read part of it so far (on audiobook, I love those), but I already feel like It's been explained to me, in simple terms, vital data about how economy works. Data which really should be part of everybody's basic education, but which it seems that even many economists are ignorant about, or lying about.
For example how "money" is different than "wealth". Money is an exchange medium. Wealth is the things you can buy with money.
And how inflation is actually money supply going up faster than good supply, while rising prices is only the result of inflation.
For example data about how the problems of the Western economy go much deeper and longer back than I knew, and what a trade deficit really means. And how when economists say that the economy is doing better than ever because consumption is bigger than ever, that's like saying little John is more educated than ever because he is now watching 10 hours of television per day instead of 8. The base of economy is savings and production, and those have been declining like all-git-out in the West for decades. The "boom" in recent years have been borrowed money.
He explains how the fact that the US has gone from production to service is not progress, but disaster. And getting a whole big production economy going again is obviously not going to be a trivial matter, holy cow.
He's talking about the US economy mainly, but it seems to me at the very least Britain is in the same boat, seeing as how the Sterling is falling too, and that Britain has also stopped producing things which can be exchanged.
If he is right, and I think so, then the current crisis is only the beginning. Could be grim.
I'm looking forward to the last half of the book where he promises to talk about how one can avoid going down with the ship.
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Note from wikipedea:
Schiff was once accused of "anti-American" views for his pessimistic assessment of the US economy. In October 2007 Charles Payne of [Wstreet.com] accused Schiff of "Anti-Americanism in the guise of financial advice." on Fox News' "Bull's & Bears" program.
In the same segment Mr. Payne suggested purchasing the stock of Washington Mutual, a company which less than 52 weeks later was seized by federal authorities in what amounted to the greatest bank failure in history.
Seems to be an interesting book. I've just ordered a (hard-)copy.
ReplyDeleteCan't help it but listening to audio books makes me sleepy, lol.
I hope the book won't turn my understanding of economics upside down as Pugley's Alpha Strategy has done.
Alpha Strategy is a good preparation for this one.
ReplyDeleteThe British egg-heads thought they were pretty clever staying outside the Euro when it slowly went down for a while. They also thought the bubble-economy of the USA was much more solid than very carefully managed (TOO carefully?) European Union.
ReplyDeleteAs we say in Medicine : Time makes the best diagnoses.
"See? I told you I was sick!" -- Classic epitaph. (Seen in the Neopets Gelert graveyard.)
The widespread opinion on the Continent is that the political class of Great Britain wants to play on both ends, enjoying all the advantages of being within the EU but remaining you-know-who's Mini-Me clone. For instance, with that Iraq affair.
I dunno, but these rumours might be on to something there...
Methinks the USA would HATE it if a true overseas political/economical counterpart power was to emerge.
Tough luck : the EU building is steadily progressing, contrarily to the influence of their Coalition satellites within it ; Russia is no more rising, it is standing well and firm today ; China has spread more of its influence in Africa than the Camorra in Italy...
My personal hope? That the smarts of an Obama following the arsiness of a Bush will be wise enough to forget power struggles "for the sake of power struggles" and at long last start treating the rest of the world as fair partners. As should have been done when the Soviet Union collapsed. Such a tragic waste of time and efforts!
Because we're all in the same spherical boat together. Even "Brother Osama" has no benefit to draw from a climate and environmental collapse. And his annoying psychosis would be easier treated if calm private clinics in the country remain funded...
Quite an amusing note from wikipedea:
ReplyDeleteSchiff was once accused of "anti-American" views for his pessimistic assessment of the US economy. In October 2007 Charles Payne of [Wstreet.com] accused Schiff of "Anti-Americanism in the guise of financial advice." on Fox News' "Bull's & Bears" program.[18]. Schiff has rejected such criticism "misplaced".
In the same segment Mr. Payne suggested purchasing the stock of Washington Mutual, a company which less than 52 weeks later was seized by federal authorities in what amounted to the greatest bank failure in history.
Good one, Pete, thanks.
ReplyDeletePascal said: "The British egg-heads thought they were pretty clever staying outside the Euro when it slowly went down for a while."
Good point.
Funny enough though, since I personally earn most my income from the US, I'm happy that the pound has fallen more than the Dollar. At least for the moment, who knows what the long range effects will be.
(captcha: "gloongym")
Actually, the USD is now rallying (temporarily). Sterling has fallen.
ReplyDeleteThe US is a classic example of the failure of ideology. In one instance after another, they (we) have made dumb, stupid mistakes: destroying the unions, creating tax shelter extremes for the corporations, creating a service economy in preference to industry, exporting the services to save money (whatever happened to 'trickle-down'?) . . .
ReplyDeleteIn other words, they were gutting what had made us what we were, step by dumb step, and they couldn't see it. It isn't that absolute power corrupts absolutely, but that it BLINDS absolutely!
On the other hand, we wouldn't now have Obama, I'm sure, if we hadn't had 8 years of Bush.