Oct. 7, 2003
Financial Reckoning Day: Surviving the Soft Depression of the 21st Century
by Bill Bonner and Addison Wiggin
($27.95, WILEY, 9/03, 2nd printing, WSJ Bestseller)
A book review by David Bradshaw, Idea Factory Press
"A word fitly spoken is like apples of gold in pictures of silver."
"Peace, prosperity, liberty and morals have an intimate connection."
-Thomas Jefferson, 1813
Over the last three years of reading Bill Bonner's Daily Reckoning, I have come to admire both his moral and economic philosophy and consider it to be one of the most trustworthy on the planet.
Because one's moral philosophy is the foundation of their economic theory, it is critical to filter our financial counsel with the same care we would in filtering our moral counsel -- before we take it to heart.
Properly discerning the times requires intellect, experience and humility. Thankfully, all of these characteristics intersect in this book. Bill serves his readers as more of a guiding light than a self-proclaimed "expert."
Financial Reckoning Day effortlessly bridges present day problems with historic lessons, without pushing the reader to arrive at all of the same conclusions.
On behalf of the morally concerned majority, I would like to warn you that Financial Reckoning Day is a very dangerous read, especially to those unwilling to face hard, financial truths of the 21st century head on.
The authors skillfully paint a very different big picture of America's present economic problems -- as well as key solutions. They expose a much more precarious economic future, than most Americans have ever been told (or at least been willing to listen to).
You are not likely to uncover the wisdom distilled in this book in the mass media, but Truth has a way of passing the test of time and it's getting harder to ignore the logic behind owning physical gold and shunning debt.
The authors have mastered the art of finding humor and entertainment while tearing the veil off of the commonly held deceptions of our age. These metaphors help the reader achieve an increased knowledge, wisdom and discernment -- at just the moment NYT says investors are- "most confused."
A CLEAR CALL TO ACTION
Their clarion call is to restore morality back into our financial world, replacing fiat money system with the real thing: gold. (If not nationally, at least personally).
Their reason is flawless, reminiscent of a book that changed millions of people's minds back in the late 1960s about morality - Evidence That Demands A Verdict, written by Josh McDowell.
The Daily Reckoning (DR) team is very humble, never demanding justice, but warning readers that it always comes -or at least it "ought to!" come.
DR cuts through history like a hot knife, stopping briefly to identify mass movements, crowd psychology, demography, progress, Greenspan's destiny, the deleveraging of America and the moral hazards we have allowed to derail our future.
Without passing moral judgment upon their readers, the DR team has done what they do best- cause the reader to think about the which moral foundation -- that undergirds the economy, our money system, our markets are presently built upon.
High hopes of sustainable stock market rallies and economic recovery are part of a "Grand Illusion." - that is, to honestly believe that all of the market excesses of the 20th century are fully accounted for by a phony recession- and now "phony recovery" could only be achieved in an "Era of Crowds" such as we have seen during the last 50 years.
Wall Street looks in the mirror daily and sees a beauty one day...a beast the next. The authors, paint a much bigger picture of America, Europe and Japan's recent fiascos in a valient effort to alert the reader of yet another debaucle - of even greater consequence - that will likely not unfold until at least 2017.
A WORD FITLY SPOKEN
This book, like the asset of the 21st century [GOLD] itself, is a financial word fitly spoken...allowing the reader to rethink their strategy using new clues provided by the DR team.
For example, they explain why on the first day of each decade there are ample clues as to which investment will perform best. In the 70s, the "Trade of the Decade" was gold...in the 80s it was the Nikkei...in the 90s it was the Dow...in 2000 it is gold again.
Hint: Don't rush your reading. Like fine wine, this book is to be savored and likely reread. Bonner and Wiggin illustrate that when it comes to economics, it ain't so much of not knowing - as it is knowing what ain't so!
-David Bradshaw, Editor, SwissAmerica.com
NOTE: The conclusion of Financial Reckoning Day is that you need to own gold. Period. Here's a FREE OFFERto help you get educated about which type of gold offers the most protection, privacy and profit potential.
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**LISTEN TO BILL BONNER radio interview on the book:KUIK, Oct. 25, 2003 - 15 TRT
P.S. Here are 16 of my favorite quotables from Financial Reckoning Day ...
#1 "One of the great marvels of life is not that fools and their money are soon parted, but that they ever got together in the first place."
#2 "The bust phase of an investment mania comes about when reality begins to nag, profits are not realized and confidence turns to trepidation- and then fear."
#3 "Newton's Third Law applies to economies as well as physics- a bubble produced by borrowing and spending collapses into an anti-bubble of exaggerated thrift, bankruptcy and debt cancellation."
#4. Chart - "Great bear markets take their time - and their toll. Stocks as an asset class are likely to lose their popular fascination for the next decade or more. Japanese stocks returned to their 1984 trend line - 17 years later. The U.S. bear market began in 2000. If the U.S. were to repeat the Japanese experience, stock could return to their 1995 trend line, with the Dow below 4,000, in the year 2017."
#5. "Rep. Ron Paul of Texas handed Greenspan a copy of 'Gold and Economic Freedom' posing the question: Would you like to add a disclaimer?" "No," said the man who created more unbacked paper money than any man in history - "I wouldn't change a single word."
#6. "Like the difference between real profits and virtual ones, the transformation of data and information requires time and effort. Wisdom can take decades, rules and principles can take centuries."
#7. "In short, democratic government was no longer a spectator - it had become the biggest participant in the supposedly free markets of the Western world."
#8. "In 1960, there were nearly 7 working age people for every person over 65. In 2000, that number dropped to 4.5. By 2030, the OECD expects only 2.5 people working for every dependent elderly in the developed world."
#9."Three little numbers at the end of the world: 1) Average age of American baby boomers on Jan.-1-02: 46. 2) Average amount in retirement plan $50,000. 3) Number of years at 6% growth to reach comfortable retirement income: 63. Eighty per cent of the population has no more than eight months worth of financial reserve."
#10. "After the terrorist attacks, the calls for consumer spending began to sound as much like patriotic jingos as economic analysis. Thrift came to be seen as an enemy of the state, almost as diabolical as Osama bin Laden."
#11. "Wouldn't it be nice if people really could cure their financial troubles by spending more money? Nothing comes from nothing; adding zeros produces no positive number. For the individual it is obvious that borrowing and spending will not produce enduring wealth. But for an economy, it almost seems possible."
#12. "Thus, it is the aim of good government to stimulate production, or bad government to encourage consumption." - Jean-Baptist, 1803
#13. "Spending beyond your means does not produce economic perfection but an economic dead end, just as might have been predicted by a moral philosopher but missed by an economist."
#14. "Modern economists no longer believe in ought." They do not appreciate her moral tone - to them, the economy is a giant machine with no soul, no heart - no right and no wrong. It is just a matter of finding the accelerator."
#15. "Against the sorry record of managed currencies is the exemplary one of gold. Gold is found on earth in very limited amounts - only 3.5 parts per billion."
#16. "The world as we have known it is coming to an end. But what do we care? We smile and vow to enjoy it. The secret to enjoying all mass movements is to be a spectator, not a participant. America will have to find a new economic model, for it can no longer hope to spend and borrow its way to prosperity."
P.P.S. Still not sure? Here's the Publisher's Overview and a Special 30% Discount Offer:
Is the U.S. economy turning Japanese?
According to maverick investment writers Bill Bonner and Addison Wiggin, the country's current economic picture mirrors that of Japan's decade-old "soft depression" -caused by an aging population and a structural reaction to its record-breaking financial boom.
As the U.S. downturn drags on, investors want to know what's behind it all, what's in store, and what they can do to safeguard their investments. Financial Reckoning Day: Surviving the Soft Depression of the 21st Century helps you chart your own financial destiny in today's precarious investing climate. Irreverent and eye-opening, this "big picture" investment book starts with a simple premise: history shows us that investing has less to do with raw economic data and new statistics- the domain of most other investment books -and more to do with old rules, metaphors, and experience.
Putting this unique metaphorical focus (and its underlying principles) into action, Financial Reckoning Day draws upon military and sociopolitical milestones to highlight the surges and slides of history. Going a step further, the authors emphasize the powerful relevance of these events to today's economic uncertainties.
Brimming with down-to-earth wisdom and take-it-to-heart lessons, Financial Reckoning Day tells you:
* Why the "Information Age" stock boom went bust, with sobering insights into such companies as Amazon.com, Cisco Systems, and Global Crossing
* Why high-spending, high-borrowing consumerism "leveraged" the U.S. economy and what you might expect from the "soft, slow depression" in the decade ahead
* Why Japan's "miracle economy" unexpectedly collapsed and why a decade of monetary stimulus has failed to revive it
* How the Civil War -and the financing of wars in general -led to the creation of the central banking system
* What the legacy of Fed chief Alan Greenspan "ought" to be
* How the speculative mania for John Law's Compagnie des Indes in the early eighteenth century presaged the dot.com stock craze
* How the "Aging of the West" is more likely to affect stock prices in the years to come than fiscal policy
As it reveals the hazards of democratic consumer capitalism and the financial follies of history, Financial Reckoning Day warns that depressions are not necessarily a thing of the past. And that's why it's so vital to have an essential, wide-angle resource like this on hand . . . to get you through the current crunch -and put profits back in your portfolio.
"History shows that people who save and invest grow and prosper, and the others deteriorate and collapse. As Financial Reckoning Day demonstrates, artificially low interest rates and rapid credit creation policies set by Alan Greenspan and the Federal Reserve caused the bubble in U.S. stocks of the late '90s. . . . Now, policies being pursued at the Fed are making the bubble worse. They are changing it from a stock market bubble to a consumption and housing bubble. And when those bubbles burst, it's going to be worse than the stock market bubble . . . No one, of course, wants to hear it. They want the quick fix. They want to buy the stock and watch it go up twenty-five percent because that's what happened last year, and that's what they say on TV."
author of the bestseller Adventure Capitalist from the Foreword to Financial Reckoning Day
Advanced praise from bestselling authors
"An investment book that will not only enlarge your investment horizon, but also make you laugh and thoroughly entertain you for a few hours."
-Dr. Marc Faber, author of the bestseller Tomorrow's Gold
"Financial Reckoning Day is . . . in the category of scintillating sex or good vision, something to be savored and enjoyed-before it is too late."
-James Dale Davidson, author of the bestseller The Great Reckoning and The Sovereign Individual
"A powerful and insightful vision . . . each paragraph stimulates a new rush of thoughts that fills in gaping holes in the investor's understanding of what has happened to their dreams . . . while prepping them to confront any new confusion that may arrive."
-Martin D. Weiss, author of the bestseller Crash Profits
Author Biography: WILLIAM BONNER is President and CEO of Agora Publishing, one of the largest financial newsletter companies. Headquartered in Baltimore, Agora now has offices overseas in London, Paris, Ireland, Bonn, and Johannesburg. Mr. Bonner is also the creator of the Daily Reckoning, a contrarian financial newsletter sent via e-mail (dailyreckoning.com). The newsletter now has more than 500,000 readers in the United States and Great Britain and is translated daily into German and French. It has received praise from mainstream publications, including Money.
ADDISON WIGGIN is the Managing Editor for the Daily Reckoning. A contributor to Strategic Investment, Mr. Wiggin is also the author of the Daily Reckoning Weekend Edition (dailyreckoning.com), a weekly wrap-up of contrarian investment analysis. Before joining the team, he served at the Cato Institute in Washington, D.C., and earned his master's in philosophy from St. John's College in Santa Fe, New Mexico. Order the book!