The Coming Collapse of the Dollar and How to Profit from It : Make a Fortune by Investing in Gold and Other Hard Assets

Rating:
Summary: Good book with a few flaws
Review: Don't let the title fool you, this is largely a book about why you should buy gold. The first part of the book makes the case for a collapse in the dollar. In the second part the authors tell why they think that the best way to profit from this is to avoid stocks, bonds, and real estate and invest in gold instead. The authors also make a case for a bull market in gold independent of the dollar's collapse. They write a little about silver, palladium, and platinum, but the lion's share of the investment advice is about gold.

An impending dollar collapse is not startling or even very original, since many others have said the same thing. Even former Fed chief Paul Volcker has made comments to that effect. But this is the first book I've read in a long time that is bullish on gold. Even commodities bulls like Jim Rogers, who devotes a chapter in his new book to gold, seem at best lukewarm about precious metals. The authors make some sound arguments for a strong bull market in gold.

This is an informative and well-written book, and I recommend it. But I have a few caveats, which is why I'm only giving it four stars.
1. The title is misleading. The subtitle "Make a Fortune by Investing in Gold and Other Hard Assets" is much more apt.
2. One of the authors, James Turk, is in the business of helping investors buy gold, so the reader is not getting a totally objective viewpoint.
3. In one of the chapters, the authors make the kooky claim that central banks have conspired to keep the price of gold artificially low.
4. The authors give no recommendations on profiting from the dollar's collapse by placing money in foreign-denominated bank accounts and CDs or by investing in natural resources. The "Other Hard Assets" in the subtitle is largely limited to precious metals other than gold.

Rating:
Summary: Rational thesis in an irrational world!
Review: I like this book. The documentation is solid and the logical exposition is nearly flawless. The authors build a compelling case for restructuring one's portfolio to include a large gold component. If one scans the charts, COMEX gold has made a huge, rounding turn from 1996 to 2004. The high price of this formation is 420 and the low price 260. A measuring implication on this formation suggests an upside target price of 580, which is a potential 32% gain. [420-260=160+420=580.] Gold has completed this formation with a bullish, upside breakout. In order for gold to reach this target price, the dollar has to continue its slide to oblivion. However, there are signs that the dollar index is stabilizing and trying to climb to 90 from its current price of 83.

What makes me suspicious about the fruition of the authors' thesis is that there is too much company from other writers such as Richard Duncan, Ferdinand Lips, Jim Rogers, Peter Warburton, etc. It is arguable that this book presently represents the view of the crowd rather than expressing a contrarian worldview. In my experience, real, damaging crises arrive both quickly and unannounced. Seldom do we have the luxury of time for discussing the onset and progression of a crisis through the mass media in a calm, rational manner and have the year or more it takes to write and publish books about how to survive and prosper from the crisis. As a matter of fact, there is much evidence that when books about impending crises become available to the mass markets, the danger is substantially past. Irrationality - not rationality - is the ding an sich of financial markets!

Financial markets are discounting mechanisms that make the best use of forecasts, from all information which is known, to augur the likely level and trend of profits from nine to eighteen months in advance. What we read on the front page of the Wall Street Journal, Investor's Business Daily, or the Financial Times hardly qualifies as being news which can move the markets because the markets have already anticipated the impact of the events before the stories appeared in print.

To make matters worse, if the authors' thesis is correct and comes to pass, it is not likely that the average investor would have the prescience, ability, or resources necessary for weathering the financial storm - even armed with this book! A financial panic of this magnitude would have the most dire geopolitical consequences. Playing with numbers would be futile. The only safe harbor would be a move of one's person and possessions to some island of stability, such as Switzerland.

I personally believe that the severe decree can (and will) be averted. I feel that there is still resiliance in the western tradition. Most of the ills besetting the US today can be traced to a recent history of an overstrong dollar which gave rise to the Japanese and Chinese economic miracles, a highly-promoted culture of rampant consumerism, and the misguided, suicidal "free" trade agreements of the past twenty years. I think that the changing demographics in the US will encourage saving and investment over consumption, a rationalization of the current and capital account imbalances, and a total discrediting of and revulsion from the New World Order paradigm.

Don't worry - be happy!

Rating:
Summary: Interesting take, good background, so-so advice
Review: In perhaps one of the better written books on investing in gold and gold related securities, the authors make a plausible case against the dollar. The first part of the book is the best written component of the book and provides a good summary of the various times when currencies have collapsed, using a wide-ranging examples. These examples are then used to abstract a few hypotheses on why the dollar could fail. The impact of government spending, budget deficit, trade deficit are all well explained. The first part of the book ends with a bold claim - invest in gold only since dollar (hence typical stocks) are doomed to fail. The rationale for that claim is presented in the second part....though well-written, it is not entirely convincing. The third part addresses some investment ideas and other resources worth referring to for additional information. It is surprising that the authors advice a portfolio (in fact three different types - conservative, moderate and aggressive), 100% invested in gold/gold-related stocks. While the general investment community recommends an exposure for gold and other precious metals not to exceed 5-10% of a portfolio, the authors' suggested portfolios are an interesting exception. It would have been nice to see how their portfolio performed using historical data to compare with SP500 or other benchmark. No meaningful comparison is provided, though.
Overall, a well-written book with easy reading style, plenty of charts to represent data, fairly well-organized arguments, but not necessarily the best investment strategy (literally putting all money in one basket)....but certainly a reccomended read, and might give you a different perspective on investing in precious metals and commodities (may be a better bet than real estate, long term).

Rating:
Summary: Superbly Presented, Beautifully Written, Utterly Prescient
Review: The best thing about "The Coming Collapse of the Dollar" is that it is very well written, which makes it pleasurable to read and quick to finish. That way, you can start soon carrying out its sensible advice. It is a brilliant and intelligent presentation of all the facts you need to know to invest in gold and related assets. We all know that any family or household cannot spend more than it takes in, but that is exactly what the U.S. has been doing in spades for the last 25 years. At some point there has to be a day of reckoning. We will have to pay the piper at some point, and face the music of our own irresponsibility. What is playing out in the U.S. and the world economy has happened many times before to different great civilizations. "Collapse" describes the hyperinflations of the Roman Empire, England in the 17th Century, France under Louis XIV, the Continental Congress before the U.S. Constitution, and the Weimar Republic in Germany, which led to the rise of Adolph Hitler and the horrors of World War II. If you think it can't happen here, the book explains that all great nations have been hobbled by the inherent nature of governments to grow larger and try to satisfy competing constituencies within their own countries. When the gov't tries to satisfy and take care of everyone and runs up high debt, inflation through currency debasement is inevitable. But through all the assorted economic disasters, the people who have owned gold assets have weathered the storm and emerged even stronger. "Collapse" describes not only the history of currencies, the characteristics of real money (gold), the situation with the U.S. economy and our trading, entitlements and fiscal dilemmas, but also features whole sections devoted to what will happen to real estate and equities, being a debtor vs. being a creditor in the coming crash, how to invest in digital gold currencies, gold mutual funds, a section on options, gold ETF's, bullion coins vs. numismatics and semi-rare coins, gold storage and also other precious metals like silver, platinum (white gold) and palladium. There's even sections on the threat of government confiscation with a review of the 1933 U.S. confiscation, different scenarios which we might experience in the coming decade, an appendix with recommended books, web sites, and recommended newsletters to learn more. If you think that a crash and hyperinflation can't happen here, then how do you explain the 15-year recession in an ultra-modern democratic country like Japan, where the system is on the brink of collapse if anything goes wrong? No matter which conclusion you come to, what is undeniable is that if you do not buy at least some gold as part of your portfolio, you are leaving yourself wide open to disaster. You should probably buy a lot. This book covers every relevant area of gold investing and the rationale for gold, and does so in an easy to read and highly enjoyable way.

Rating:
Summary: The First Practical Guide To Investing In Precious Metals
Review: The title and subtitle of this book really should be swapped. However, the choice is understandable - gold has a stigma unmatched by any other investment. Gold has been a money pit for longer than most people can remember. If you want a definition of a bear market, look at the price of gold over the last 25 years. As such, there has not been one single good book on investing in gold. Until now.

The book is in two parts. The first part makes the case for a weaker US dollar. Although Mr. Turk and Mr. Rubino hit all the important points, it is far from thorough. Those who do not know that the US dollar has been declining for four years will be in for quite a shock in these chapters as this information has been glossed over by every major financial publication in the US. Those who do know and understand why will want to skip forward or read Richard Duncan's "The Dollar Crisis" which is much more thorough but also much more dry.

The natural hedge against a declining US dollar is gold. This leads to the second part which is far more valuable. They thoroughly discuss all possible ways to invest in gold and its cousins. This is not a theoretical treatise. For example, the authors describe how to buy gold and even name places where you can go to buy gold. They cover gold stocks, both big and small, naming specific companies. They even cover a new breed of options for gold stocks. Model portfolios are provided. Websites for gold related news are cited. Gold related newsletters are listed. No other book that I know of provides this type of specificity and thoroughness.

Controversially, Mr. Turk and Mr. Rubino see no problem in putting 100% of your assets in gold and gold related investments. In fact, they make the argument that anything other than gold is imprudent. It should be noted that even those who agree with their premise will dispute this assertion. But as I mentioned, the subtitle of the book is the more appropriate title - this is a book about gold, plain and simple. One may not agree with the authors' narrow recommendation, but this book still provides an excellent guide to the portion of your assets that you do choose to invest in gold.

This is a timely and unique book.

Rating:
Summary: Most Important Investment Book of 2005! Don't Delay!
Review: The title of my review may seem a bit sensationalistic but if this book is accurate (and I wholeheartedly believe that it is), we are in for a very bumpy ride. Those who are not able to see what is going on will be in for extremely difficult times.

The average investor is only capable of seeing what is popular today (Google, Sirius, etc) and usually does not look ahead to see the trends of tomorrow. This book will give the reader the necessary tools to make informed decisions. These decisions will make or break you in the upcoming 'financial storm'.

This book starts out as somewhat of a history book on the role of money in great civilizations of the past. It's interesting because we, as societies, seem to make the same mistakes that we always make with the same predictable results. Once I read this part of the book, I realized that our future is not unique. It is as it always is with the monetary policies of governments.

The book then explains the perilous conditions which presently exist in the United States, i.e. account deficits, trade deficits, consumer debt, booms and busts (i.e. the recent housing bubble). This part of the book is obviously alarming.

A lot of people may think books like this are politically motivated. They are not. These problems point more to the system than a particular political party. That's important to remember.

For the record, ever since we have been off of the gold standard, we have had a series of booms and busts. Those are not the figment of imagination, those are categorically and undeniably real! Many have been burned and their fortunes cast away because of this.

So, you know, Rubino predicted the tech stock bubble. He was scoffed then...and ultimately, proven CORRECT! That is why you need to pay attention to this. Yes, there will be scoffers...until the tide turns like a giant wave. Don't be caught on the beach!

I'm pretty sure Japanese speculators never thought their real estate market would crash or their economy would be in shambles. Yet, all the wishing couldn't save it.

Be armed with FACTS!

Finally, Turk and Rubino show you the ways to not only keep your 'head above water' during the coming financial storm (as Jim Puplava would say) but also how to prosper.

You may think this book is too alarmist but when you consider that this book was written in early 2004, it could be better said that this book is prophetic as the dollar has depreciated to record levels. Turk and Rubino were right!

If you think that most economists are not alarmed (because CNBC and the like are not warning you of impending doom), then you must not listen to Stephen Roach, the Chief Economist at Morgan Stanley. You also must not know that Warren Buffett, the billionaire, has been converting dollars to foreign currency since 2002.

I have never reviewed a book on Amazon, but I feel that the severity of what is coming and the invaluable information of this book warrant my pleas for you to purchase this book...and obviously, to take action! Your livelihood and the security of your family may depend on it.

Looking back, this may be the single most important financial book (I was going to say book in general but I'll reserve that for the Scriptures) you will read in your lifetime.

As far as any naysayers, who will not believe the premise of this book..I only ask you to give this book a chance and read it for yourself. You will go away with very vital knowledge, I guarantee it!

Rating:
Summary: Buy our book Suckers!
Review: This is another book for people looking to get rich quick. Lets all say it together now: if it sounds too good to be true...

If you want to make a lot of money in the stock market or through commodities markets quickly, then you better spend years studying and training, and then working in those environments. Don't expect to read some book and then be able to tame the markets.

The book goes on and on about the impending doom the U.S. economy faces. So much the better to motivate you into believing its premise about dollar collapse. It says the U.S. has a $7 trillion national debt. So what? Thats about 65% of GDP, well within the NORMAL range for advanced industrialized nations. Whats more, about half of the national debt is money that the government owes itself!

A ballooning trade deficit? Again, so what! We've been running trade deficits most of the time since the republic was founded, well over 2000 years ago now. In fact, the last time we had a trade surplus was about 13 years ago, when the economy was in (gasp) recession! Trade deficits are a sign of economic strength, it means we have the ability to purchase excess goods produced by other nations. Why are economies in Europe so anemic if they are running surpluses? Meanwhile here in the U.S. we clock 4% annual GDP growth, massive productivity gains, and stamp inflation down to 2%!

And lets talk about dollar depreciation. The authors note that the dollar has been depreciating for roughly three years, about the same amount of time since the Fed started pumping excess liquidity into the economy and giving us rock-bottom interest rates to shore things up in the middle of recession, terrorist attacks, and wars. Now there are too many dollars floating around and the value has correspondingly dropped. The Fed has already started removing the excess liquidity to decrease supply.

So, with the U.S. economy powering on, demand for dollar denominated assets, including debt instruments, will continue. This in the face of a decreased dollar supply from the Federal Reserve. How is it the dollar will collapse in the face of this activity? You might ignore this if you buy into the author's premise about just how terrible the twin trade and budget deficits are. Those are signs of strength, not weakness.

This book is not worth the read. Be smart with your money, in terms of where you spend it and invest it!

Rating:
Summary: Excellent
Review: Turk and Rabino provide an excellent overview of the current global financial picture and lay out a common sense strategy for investors to navigate uncertain times. Complex topics are made clear and accessible; lots of graphs compress lots of history into easy reading. The result is effortless and entertaining reading that transforms an overwhelming environment into a world of opportunity. First rate work, gentlemen!