Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos

By James Rickards

A Wall Street Journal bestseller

Financial expert, investment advisor and New York Times bestselling author James Rickards shows why and how global financial markets are being artificially inflated--and what smart investors can do to protect their assets 

What goes up, must come down. As any student of financial history knows, the dizzying heights of the stock market can't continue indefinitely--especially since asset prices have been artificially inflated by investor optimism around the Trump administration, ruinously low interest rates, and the infiltration of behavioral economics into our financial lives. The elites are prepared, but what's the average investor to do?

James Rickards, the author of the prescient books Currency Wars, The Death of Money, and The Road to Ruin, lays out the true risks to our financial system, and offers invaluable advice on how best to weather the storm. You'll learn, for instance:

  *  How behavioral economists prop up the market: Funds that administer 401(k)s use all kinds of tricks to make you invest more, inflating asset prices to unsustainable levels.
  *  Why digital currencies like Bitcoin and Ethereum are best avoided.
  *  Why passive investing has been overhyped: The average investor has been scolded into passively managed index funds. But active investors will soon have a big advantage.
  *  What the financial landscape will look like after the next crisis: it will not be an apocalypse, but it will be radically different. Those who forsee this landscape can prepare now to preserve wealth.

Provocative, stirring, and full of counterintuitive advice, Aftermath is the book every smart investor will want to get their hands on--as soon as possible.

• Language: English
• Publisher: Penguin Group
• Release date: Jul 23, 2019
• ISBN: 9780735216969

Reviews for Aftermath

[writemoves · Rating: 4 out of 5 stars]

I picked this book up on a whim when I was at Barnes and Noble. This seems to be a cautionary tale on how the economy not only in the United States but also globally can go wrong. Rickards offers some general investment ideas on how investors can protect themselves. Very interesting read.

Aftermath notes:

By purchasing long-term treasury securities, the Fed lowered their total return and made them less attractive to investors. In turn, this made stocks and real estate more attractive on a relative basis.

Mercantilism makes China the fastest growing major economy, while free trade leaves the United States to languish with depression level growth.

The debt to GDP ratio is merely national debt divided by national output calculated in the form of gross domestic product, or GDP.

During the Reagan years, the US debt to GDP ratio grew from 32.5% to 53.1% the highest level seen since the early 1960s.

Clinton presided over the longest peacetime economic expansion in US history. At the end of Clinton's presidency, he even produced a small budget surplus for the first time since 1969.

The combination of tax cuts and increased spending signaled the return of trillion dollar annual deficits that will soon push the US debt to GDP ratio from my 105% to 115% (trump)

1. Reduce exposure to high valuation, High growth stocks and technology, media and advertising ( Facebook, Apple, Amazon, Netflix and Google)

2. Allocate part of one's portfolio to sectors that perform well in low growth and deflationary environments, including utilities, 10 year US treasury notes, and high quality municipal bonds.

3. Increase your allocation to cash.

I have yet to meet a hedge fund billionaire, and I've met many, who does not have a large personal allocation to physical gold.

The main difference between today's market crashes and past market crashes is automation––automation trading.

Today, over 15% of US debt is owed to foreign countries including China, Taiwan, and Japan.

The GBI, also called universal basic income, UBI or simply basic income is an old idea offered as a new remedy for an economy that produces too few jobs with decent wages. The idea is strikingly simple. Government will pay every citizen a basic income from public resources. It is paid without any requirement for work and regardless of any other income.

How does an investor prepare for a world that could be inflationary or deflationary? This solution is called the barbell portfolio. On one side of the barbell you have inflation protection consisting of gold, silver, land, and other hard assets. On the other side of the barbell you have deflation protection consisting of 10 year treasury notes, utility stocks, and technology companies that continually reduce costs. Connecting the two sides of the barbell it's an allocation of cash. The cash reduces the overall volatility of the portfolio and provides optionality to pivot towards inflation or deflation protection if either becomes dominant.