Before giving my two cents about the book, let me give you a small background of the writer first. Peter David Schiff is an American economic commentator, author and licensed stock broker. He is known for his insights on the United States economy and for having foretold the economic crisis of 2008. His credibility as a financial analyst is remarkable for he graduated from the University of California at Berkley with a degree in finance and accounting. He was one of the few people who accurately foretold the scope and scale of the credit catastrophe, and then sent a year and a half trying to get his message out but to no avail, until it’s too late. The book I am going to review was his rise to media distinction which was published in 2007.
Peter Schiff did not only predict the decline in the value of the dollar but he also predicted the bankruptcy of Fannie Mae and Freddie Mac, Lehman Brothers, Bear Stearns, Citibank and the housing bubble bust. He is definitely not a magician but he takes what a reasonably learned person can see: the 'fake' economic growth the US has gone through for the past 15 years was/is unsustainable.
He begins Crash Proof by giving details of how Asian economies are prepared to disrupt the U.S. economy by emphasizing on Western spending and consumerism versus Asian saving and producing. He expressed that the United States is based on service without anything to produce or sell, while Asia is based on manufacture where they produce goods that we buy on IOUs thus creating a trade deficit. However, Schiff neglects the fact that the United States is also a modern manufacturer where they buy, sell, and export goods over the Internet in the mode of media, ideas, and software.
This book also provides you a blue print to guard and grow your wealth by moving your assets out of the dollar and into other foreign currencies. It advises people to employ funds that earn known rates such as savings accounts, time deposits, CDs, bonds, and the like. He reiterates that housing, stock market and real estate do not indicate real savings as they require a buyer in order for them to be profitable. He also recommends that people should expand as a way to minimize risk. He suggests investing in natural resources, energy companies, and foreign markets so that if the U.S. market were to crumple, investments in foreign markets would at least cover the losses, especially with the favorable exchange rates.
However, while Schiff's analysis of the credit crisis was precise, his financial advice is of passable merit. Schiff's best advice is to evade US stocks. Schiff was influencing people to do this in 2007, and anyone who followed this advice would have been secured by the economic chaos.
The piece of recommendation that is most tricky is Schiff's advice as to invest your cash out US stocks by buying international stocks. If you had abided this advice, you would have squandered more than if you had stayed in US stocks, or just kept the cash because international exchanges have been hit worse than the US. Even if most of Schiff's predictions have come disappointingly true, one has not: Schiff forecasted a shattering collapse of the dollar as the world's reserve currency. The opposite has happened as the dollar has strengthened in value as there were extreme investors who have seen everything fall in value.
Crash Proof is a good read for it gives you insights about the economy’s rise and fall. It is not necessary that you to believe and follow Schiff’s advice. However, I recommend this book because this is a good read. If you read just one book in a year, make it this one, and then do something for a change.
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