The full title of this book by John Mauldin and Jonathan Tepper is
“Code Red: How to Protect Your Savings From the Coming Crisis“.
In my review at Amazon.co.uk, I gave this book Four Stars. This means that it is Good and Well Worth Reading.
Here is my book review.
It’s time to be scared… very scared
This is an excellent book about the current economic climate of exceptional action by central bankers with quantitative easing and the suppression of interest rates.
It’s written in a very easy to read and understand style and will help anyone gain a better understanding of how the economic situation could play out.
Conditions are generally deflationary as over-indebted consumers, companies and even governments look at how they can live within their incomes. But central banks are doing their best to cause some inflation and weaken interest rates.
It’s a dangerous game.
After all, central bankers showed that they couldn’t be relied on to do the right things when the economic situation was playing out on conventional rules. It’s very optimistic to think that they will get it right when we are no longer playing to the rules.
The sub-title “How To Protect Your Savings From The Current Crisis” may mislead you into thinking that you’re going to get much clearer advice and ideas than you do.
It introduces Harry Browne’s Permanent Portfolio idea which I like (see The Permanent Portfolio: Harry Browne’s Long-Term Investment Strategy) and explains the importance of diversification but the message I got was…
You’re likely to lose money, whatever you do as a saver and investor.
That’s because the past and future actions of the authorities mean cash and bonds are likely to lose value under inflationary conditions and asset prices have been driven into bubble territory.
i.e. if you sit on the sidelines in cash you’re in trouble and if you stay invested, you’re also likely to be in trouble.
Of course, you could time things exactly right, get out in time and make a lot of money as investments rebound after the crash but what are the odds? In fact the book provides a warning against thinking you can time the markets.
Basically governments around the world are in a mess because of the high debts and to get themselves out of trouble, the majority of savers have to incur losses.
I’ve docked it a star because it doesn’t live up to the sub-title but I can’t imagine anything that can.
Forewarned is forearmed and if the book makes you think clearly about what you’re doing with your savings and pensions, then I think it’s well worth the money to buy it and the time to read it. It’s time to make some decisions rather than sitting back and hoping…
It is available to buy from Amazon.co.uk and Amazon.com.
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