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| Crash Proof: How to Profit From the Coming Economic Collapse (Lynn Sonberg Books) | 
 enlarge | Authors: Peter D. Schiff, John Downes
Publisher: Wiley
Category: Book
List Price: $27.95
Buy New: $16.75
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Avg. Customer Rating:  246 reviews
Sales Rank: 47
Media: Hardcover
Number Of Items: 1
Pages: 288
Shipping Weight (lbs): 1.1
Dimensions (in): 9.1 x 6.2 x 1.1
ISBN: 0470043601
Dewey Decimal Number: 332.60973
EAN: 9780470043608
ASIN: 0470043601
Publication Date: February 26, 2007
Availability: Usually ships in 1-2 business days
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Product Description
The economic tipping point for the United States is no longer theoretical. It is a reality today. The country has gone from the world's largest creditor to its greatest debtor; the value of the dollar is sinking; domestic manufacturing is winding down - and these trends don't seem to be slowing. Peter Schiff casts a sharp, clear-sighted eye on these factors and explains what the possible effects may be and how investors can protect themselves. For more than a decade, Schiff has not only observed the U.S. economy, but also helped his clients reposition their portfolios to reflect his outlook. What he sees is a nation facing an economic storm brought on by growing federal, personal, and corporate debt, too-little savings, a declining dollar, and lack of domestic manufacturing.
Crash-Proof is an informed and informative warning of a looming period marked by sizeable tax hikes, loss of retirement benefits, double digit inflation, even - as happened recently in Argentina - the possible collapse of the middle class. However, Schiff does have a survival plan that can provide the protection that readers will need in the coming years.
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| Customer Reviews: Read 241 more reviews...
 From a FinancialSense.com listener... March 13, 2007
640 out of 701 found this review helpful
Peter Schiff, son of American patriot Irwin Schiff, has written a very useful book that can not only assist you to take the concrete steps necessary for financial survival, but also change your individual psychology toward the storm on the horizon that is rapidly gathering strength. Today, we have the illusion of prosperity, and the sooner we break through that delusional state, the sooner we can prepare for darker days.
At this point, there are so many possible triggers for the Second Great Depression, it's striking that it has not already begun. The sub-prime meltdown may just be such a trigger that brings down the house of cards, once it becomes more clear which entities actually hold all the risk created as part of the Housing Bubble. Wall Street, sub-prime lenders, and the large banks have been ingenious in their ability to push risk onto other parties, but it's not clear if the counter-parties will have the ability to weather the defaults. Thus, the risk may yet reside with the banks, which normally would have been more restricted in the number of loans they could create by more traditional standards. So much debt has been created, and so much risk obfuscated, that it is hard to imagine our present illusion of prosperity can be maintained much longer.
Mr. Schiff breaks through our modern mythology by shattering these illusions, and here is where he shines best. A bear's bear, Mr. Schiff steps down from the towers of the economic elite to provide analogies that can be readily digested by more casual readers. The analogy of the Asians and the American trapped on an island together is apropos, as it reveals much about the true state of international trade. The Dollar Bubble heavily distorts trade in favor of America, which benefits disproportionately from the inflated value of the dollar.
Mr. Schiff also understands very well the entitlement crisis brewing, and aptly names Social Security a Ponzi Scheme. Most people in Generations X and Y understand that we're the bagholders scheduled for the Ponzi Scheme, but many Baby Boomers love to be delusional about this tragic farce, thinking it's a form of savings rather than our government writing worthless IOUs to itself and lying to the American people. They think Gen X "owes" it to them! Ha Ha! The sooner we can end social security, the sooner we can start saving real money with real assets. Until then, we are slaves waiting for generational emancipation.
I remember the first time I heard Mr. Schiff speak on CNBC. The discussion was about inflation, and I couldn't help but notice Mr. Schiff's definition diverged significantly from the definition used by the brainless cheerleaders on CNBC, and for that matter, our government and most of Wall Street. The proper definition of inflation is "debasement" and secondarily, "an increase in the supply of money which causes a rise in prices" (Webster's 1982). Note the difference between these two definitions and the more commonly used definition today, which is simply "a rise in prices."
CNBC would have us believe that money supply doesn't matter when you can fool people into believing that the risks associated with exuberant money creation won't be felt by anyone, or only by parties "most able to bear that risk." How convenient! What the government doesn't want you to know is that the Federal Reserve creates inflation, and both government and the Federal Reserve benefit from this inflation at everyone else's expense. In the history of every mania and crash, rampant money creation is behind the genesis of every one. Usually, it takes a unique form. In this case, it was the Housing Bubble. So, inflation and the Housing Bubble are intimately linked. As many have often pointed out, the Housing Bubble was needed to replace the Nasdaq Bubble that popped in 2000-2002.
Finally, the juicy part - how to survive. Mr. Schiff advocates foreign equities that are sound and pay excellent dividends, which due to the Dollar Bubble, might do very well. So long as there is sufficient domestic demand (abroad) after a currency revaluation, this appears good advice. Although, one has to wonder if the U.S. catches cold, would Asians follow?
Next, buy gold and silver, and mining shares. This is pretty standard advice from the "Gloom and Doom" crowd as we are sometimes named. Lastly, he recommends staying liquid, which generally means reducing debt and keeping assets in a form that can be readily converted from one type to another. He recommends leveraging overvalued home equity in other currencies and storing small amounts of imported goods likely to rise in price, and a few other measures.
The piggy bank on the cover is a nice touch, and the list of books for further reading is most helpful for those who have not already read many of the titles.
A very quick read, easy to understand, and very well put together. I highly recommend this book.
 Not much meat. March 5, 2007
616 out of 933 found this review helpful
This book is nothing more that an overt advertisement for Peter Schiff's brokerage firm Euro Pacific Capital. There are no specific investment recommendations.
Here's the gist: The US dollar will collapse pretty soon. Schiff cites the usual suspects--- large trade deficit, large private and public debt held by foreigners, decimated manufacturing base in USA. 7 out of 10 chapters are a very generic rehash of these arguments. So you should have all of your assets in non-dollar investments (except 10-30% in gold and gold equities.) You should buy dividend paying foreign stocks through Euro Pacific Capital. Countries to consider are Canada, Hong Kong, Singapore, Japan and maybe some other pac rim countries. He particularly likes commodities. That's it. He says, "the stocks of the caliber we've been talking about will probably never need to be sold and will provide a lifetime of increasing income." If these stocks are so stable he could list 10 or 20 examples. Yet, not a single specific stock is mentioned in the book. For that contact Euro Pacific Capital. Did I mention Euro Pacific Capital?
 Mixed bag June 3, 2007
359 out of 496 found this review helpful
I've probably read close to 100 investment related books over the last 20 years and have found they generally fall into 1 of 3 categories absolutely essential (about 5% of books), decent and contain some useful info (about 70%) and utterly worthless and potentially damaging to your wealth (about 25% of books). As you might expect, this book falls into the decent category.
I give the first half of the book 4 stars. Schiff does an admirable job laying the theoretical groundwork of the current state of affairs. He does a good job of making some potentially difficult material easy to understand. However, I take exception to his dogmatic belief that hyperinflation is the only possible way our economic problems will end. There are a lot of very smart people who happen to think deflation is a real threat and Schiff goes so far as to say that those proposing this view are knowingly lying to the public. I don't buy that.
Where this book runs into difficulty is in the second part where he makes his investment recommendations. I found this part utterly worthless and unfortunately, most people are buying this book for those recommendations and not the theories in part 1. I felt like I was watching an infomercial for his asset management firm, since he goes out his way to mention it a dozen times throughout the book. I don't expect to pay $30 for what amounts to a marketing piece for his firm.
Now, on to his specific recommendations. The author bases his strategy on safety first. His idea of saftey being dividend paying foreign stocks, gold and foreign currency. The idea being that the dollar is going down the tubes and you want to be out of anything dollar denominated. Ok, I can live with this last point, but why the heck would I want to be in foreign stocks or currency if he predicts that US consumption which has fueled global growth is about to disappear. If we aren't buying the product, who will? According to Schiff, it will be the Chinese etc themselves who will step in and keep the growth going. I doubt it. At least not on their wages which amount to a few dollars a day. The fact is, if the US stops consuming, there will be no stocks anywhere in the world to hide behind. At least not for a number of years after the fall out. I don't mind the gold recommendations. I think its prudent to have about 5% in this asset class.
Another head scratcher based on his safety first principle is the idea that we should leverage our home mortgage and I'm assuming all other non-adjustable debt to the longest terms possible under the assumption that we'll let hyperinflation pay off the debt for us. Really risky, especially if a deflationary scenario plays out. Bottom line, like any infomercial, listen to some of the build up for some basic ideas (Part 1 of the book) and then ignore the worthless sales pitch (Part 2)
Act Now or Suffer Later September 24, 2007
156 out of 159 found this review helpful
I enjoyed this book even though I was previously aware of its economic arguments and suggestions for portfolio allocations. Mr. Schiff is passionate and sincere and that tone comes across in the book. For that, thank the excellent John Downes who has co-written several other good business books. Many other reveiwers here discuss the contents of the book so I won't go there.
I worked as a bullion dealer in the 1970's so this is my second "crash" cycle. Many people thought the US would collapse in the 70's due to inflation and a national debt of $1 Trillion dollars. Many thought gold would zoom to the moon. Instead, gold crashed and languished for over 20 years. That's because the US was able to shift gears.
Reagan pulled the US economy up from its tailspin by switching from printing money to issuing debt. He took advantage of the low US debt/GDP ratio to inflate debt by selling bonds to Americans and foreigners. It accomplished the same thing - letting the economy expand with a near infinite supply of cash liquidity. George W Bush then doubled the US national debt to $10 Trillion in only eight years. Low interest rates sucked in the public who took on enormous personal debt.
The US now can't rapidly inflate because the dollar would collapse and can't take on more debt because investors doubt it can be repaid in sound money. People don't accept the possibility of an economic crash because they think the US/Bernake/Fed will always be able to pull another rabbit from the hat. This complacency will lead to disaster for most investors.
The US is tapped out on debt both public and personal. The US has so debased the dollar that it has fallen tremendously since Bush II took office and continued the pattern of reckless spending.
If you don't want to believe Schiff when he warns of what's ahead then listen to Greenspan as he touts his recent autobiography. He states directly that the US will have inflation for the next 25 years. He says the outlook for stocks, bonds, and the general economy is 'gloomy' for the forseable future. He says the dollar will likely lose its reserve currency status. This is "The Maestro" talking. He says it's going to be bad. Schiff tells you how bad and what to do about it.
Some people here crticize Schiff for touting his firm's services. So what. He tells readers what to do, but most won't act for themselves. So, he provides the service. Currently, gold is at 725 (September 2007). That's not cheap, but it won't be cheaper in 2009. The US will have to reduce the rate of gov't spending and that will feed back into jobs and consumption. I doubt that the dollar will totally collapse, but when it's all said and done, we'll get a combination of "manageable" inflation and rising interest rates. Most other nations will also inflate as they prop up their economies and scramble to get their share of the world's increasingly costly oil.
The only asset that trumps oil is gold. Bite the bullet and get your share. Reduce your US stock exposure and don't go within 20 miles of a long-term bond. Your financial advisor will be of little help in these matters. Their loyalty is to commissions. You'll have to start thinking for yourself and acting on it even though it will make your stomach churn and give you a migraine.
I'd suggest a general portfolio of 25% gold (ETF or coins), 50% cash, and 25% international stock index fund. If inflation is gradual, the foreign stock will keep pace. If war or rapid inflation strikes, gold will win big. Hold cash to provide liquidity and to take advantage of opportunity. You shouldn't have to wait too long. The politicians will paper things over until the 2008 election. At least hold enough gold to offset declining purchasing power of a fixed pension. If you need 30k a year to live on, then hold that much gold - at least. Live cheap and get out of debt.
Peter Schiff's book is certainly worth reading. We'll see the truth of that within a few years.
good contribution May 6, 2007
90 out of 95 found this review helpful
I thought I had already done a review on this book but I don't see it as I scroll down, so here goes.
I have been reading several books by the "sound money" faction of economists, and I find this book to be a fine contribution.
The one point he made that was brand new to me was the assertion that the United States is not serving as a means for China to bootstrap its way to prosperity, but, rather, is an albatross around its neck. And, the related point that the coming economic depression will not be a worldwide phenomenon, but will primarily hit only certain economies such as that of the United States, with the emerging economies like China chugging along without much of a stumble. He makes a pretty good case, in my view.
As to Euro Pacific Capital, so what if he mentions it? I actually inquired with them about starting an account, but I decided not to because I found it far too tedious to analyze the companies of the stocks they recommended (and from a very cursory glance it looked like they didn't fit my investment philosophy, which is deep value.)
So my approach is: read and enjoy the book and then continue to invest in undervalued commodity stocks such as those of oil companies and small Canadian gold exploration companies that own good gold deposits but sell at $20-40 per ounce of gold in the ground.
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