Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown
I just finished reading the book “Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown“. Below is my own review based on my reading of the book and where I agree and disagree with the authors.
Aftershock is not your typical “make millions on short selling stocks” type of finance book. It’s also not so laden with technical and obfuscative jargon that you feel like you’ve been trapped in a room with Alan Greenspan.
Aftershock is more of a macroeconomics book by macroeconomists, but written in terms that anyone with a high school diploma could understand. The authors, David Wiedemer, PhD, Robert A. Weidemer, and Cindy Spitzer make predictions not just of near-term financial events, but also uncover the larger evolutionary pattern of economics from what we know now to the next stage. They can do this with a remarkable degree of confidence because they were the ones who correctly and descriptively predicted the events of 2008, which they call America’s Bubble Economy (authoring also a 2006 book by that name).
So, why do you, the average blog reader, care about this book when so many others have written similar books? Because this book is decidedly NOT similar to other finance and economics books. It is based on analysis of long-term trends coupled with true economic drivers and stressers. There is absolutely zero “cheerleading” (if anything, they are rather gloomy throughout the book) and the political undertones are remarkably neutral, veering neither left nor right, but going straight down the road of objectivity. From what I could tell, the authors are not trying to sell certain financial instruments for their benefit, although they do point out certain ones that could do well in an Aftershock economy.
The best way to introduce what Aftershock is mostly about is to present the first four bubbles they predicted to pop around 2008-2010.
- Real Estate
- Stock Market
- Private Debt
- Discretionary Spending
Appendix A describes in detail the forces driving the collapse of these bubbles and Appendix B proposes a set of likely solutions.
The first two parts of the book cover such topics as The Bubblequake (Phase I), The Aftershock, a global mega-money meltdown, how not to lose money, how to cash in on the chaos, and what Aftershock jobs and businesses will look like.
The third part of the book talks about the new economy that will necessarily evolve from the Aftershock and how holding that new view in 2006 helped the book’s authors to correctly predict the current Bubblequake. It also delves into the psychology of why leading economists and financial advisers, including Alan Greenspan chose to ignore what was right in front of them even when doing so was obviously to their detriment (hint: cheerleading). Part three is rounded out by a look ahead to the post-dollar-bubble world.
Yes, I said “post-dollar”. Meaning, there will be no more dollar. The prediction they make, in a rather politically detached manner, is that the next logical level of progression is what they’re generically calling (because such things have yet to occur, let alone be named) IMUs, or International Monetary Units, that will be mostly, if not totally electronic in nature.
If you’re still reading this, you’re probably to the right of center. And religious, or at least have one eye on the Book of Revelation. But I have to tell you that my reading of this book is that it, again, is decidedly not taking a right vs. left or religious vs. atheist position. They’re really, with a straight face, saying that the only possible outcome after every other solution is exhausted, is for currency to stabilize at the international level, starting with the G8 economies and gradually spreading to G20 economies and then to the rest of the world (with the possible exception of people in Papua New Guinea still bartering with shells). Wiedemer argues that this is the only way to reduce or eliminate inflation.
Here’s where I disagree with the authors. They state that there will not be all the political upheaval and war as typified in fiction literature or apocalyptic thinking. There will be a huge amount of societal turmoil and a lot of psychological pain as people adjust to this new reality, and lots of domestic violence, but no real political upheaval.
Where I think they are especially falling short in the analysis is in ignoring China. China has much to gain by the collapse of both the U.S. government debt bubble and dollar bubble. It would essentially give the Chinese government carte blanche to divide up the U.S. however it likes economically.
They also downplay the idea that economic vacuums left behind after the collapse of the dollar would not be taken advantage of tyrants and dictators. But, to be fair, the purpose of the book is to entertain economic predictions and to proscribe much of the political analysis in the interest of brevity and staying on task. That’s fine. I’m just hoping they will include the political ramifications in a future book or that someone will write a politically-focused book that is complementary to their analysis.
Bottom line: If you read this book, prepare to have your eyes opened widely and forcibly. You’ll never look at your wallet or credit cards the same way ever again. You’ll start thinking of contingency plans for when inflation drives the price of your house through the floor. You’ll begin to seriously consider at least 6 months if not a year of food storage for the really rough times ahead.
Times, they’re a changin’.