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More Doom and Gloom

Here's a lovely phrase that will most likely color my dreams tonight:

"...The looming possibility of a world-wide liquidity crisis triggering liquidation of assets to cover the costs of mounting debt..."

I took this phrase from a review of the book The Great Bu$T Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away. This is your Concise Reference Why and How Best to Survive It by Daniel A. Arnold on Amazon.com.

Here's the full text of the review. If Amazon.com complains, I'll remove it from my little cranny of cyber-space.
The Alpha Group that Leads the Herd, August 28, 2004
Reviewer: David Chastain "Elliotteer" (Georgia)

Mr. Arnold's title attracted my attention because I, like many financial observers, do see a depression on the horizon. His use of the 45-54 year old baby boomer demographic is interesting and echos certain ideas of Elliott Wave Theory and Socionomics.

The author's conclusions, formed using a relationship between U.S. population growth and the Dow Jones Industrial Average, support a coming financial crisis of tsunami proportions, but his optimism that things will not erupt until the beginning of the next decade and his investment recommendations for the immediate future are arguable.

A purchaser of this hour-long read would be advised to immerse himself in Robert Prechter's, Conquer the Crash and Fiancial Reckoning Day by Bonner and Wiggin. These books better illustrate the world as it is, bringing together the influence of world money supplies, gold, interest rates, world politics and, very importantly, social mood.

Where Daniel Arnold sees the correlation of the population and the Dow Jones, Prechter documents the predictive value of the Dow in measuring social mood. I would allow that Mr. Arnold has accurately pegged the 45-54 year olds as the alpha group that leads the population's mood, or herd mentality, as a result of its purchasing and investing power.

Read this book. Look at the charts. Just don't make any immediate investment decisions without considering that our world is on the verge of a massive "asset devaluation" that will transcend stocks, bonds, real estate, and for a time, precious metals. The looming possibility of a world-wide liquidity crisis triggering liquidation of assets to cover the costs of mounting debt, should be of greater concern.

Arnold issues several warnings, should his predictions come true, and offers a number of actions individuals may take. Most notably, he supports why personal property most likely will be at risk to theft or destruction in an environment of rising unemployment and rising crime, but on page 51 advocates, "even if you would not support gun-control during healthy times, consider supporting gun control legislation to help take the dangerous edge off the crime wave that will hit during the depression." Libertarians and 2nd Amendment supporters will have a real hard time with that one.

Can you tell I've reached middle age? I now sell insurance and spend a lot of time and energy thinking about money and the economy.

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