Debt, Deficits, and the Demise of the American Economy

The problem we now face is the most extraordinary financial crisis that I have ever seen or read about. -Former Federal Reserve chairman, Alan Greenspan (August 7, 2010, interview in the New York Times) So begins this extraordinary book that takes the reader through a logical and linear progression toward what is likely to become the worst financial disaster in American history. The financial Armageddon will begin with the collapse of the so-called PIIGS nations-first Greece, then Ireland-leading to a crisis of confidence in European banks and a sharp devaluation of the euro. Speculation about the fate of the EU will spark a trading frenzy in world equities markets, and the rising uncertainty will bring a rapid decline in world stock markets. The bond markets will all but shut down, and interest rates will spike. In short order, the focus will shift from Europe to the United States and its monumental debt and out-of-control deficit spending. The U.S. Treasury will shift its printing presses into high gear as it churns out additional billions to cover its debts, but America's deteriorating financial condition will cause a spike in interest rates as buyers of U.S. Treasuries lose confidence. Several states will default on their municipal debt; in many cases, retirement checks to former state employees will cease. From there, events inexorably will lead to soaring inflation of an order not seen since the 1970s. If this grim scenario seems far-fetched to you now, it won't by the time you're done reading this harrowing account of the current state of the world financial system. Authors Peter Tanous and Jeff Cox brush aside the blue skies propaganda coming out of Washington and the New York Fed to offer a cold-eyed assessment of the facts. Step by painful step, they delineate the events that have led us to the current state of affairs until they arrive at the inescapable conclusion that decades of profligate spending by government and reckless speculation in the financial markets have taken us too far down the path of destruction for us to entertain any ideas of turning back. Global economic collapse may be inevitable. The only question remaining now is what you can do to protect your assets until the crisis blows over. In answer to that question, Tanous and Cox explain why Modern Portfolio Theory and the traditional 60/40 portfolio structure no longer apply. In their place, the authors offer a set of inflation-busting asset allocation strategies that include a substantial investment of real assets-including oil, gold, timber, and even farmland-as well as inflation-protected bonds. A storm is coming. How soon, exactly, it will arrive, no one can say for sure. If you want to know how it will shake out and what you can do to shield your hard-earned assets from the worst of it, read Debt, Deficits, and the Demise of the American Economy.