John T Reed’s How To Protect Your Life Savings From Hyperinflation & Depresion

Book Title: How To Protect Your Life Savings From Hyperinflation & Depression

Author: John T. Reed

Readability: Easy, he makes complex things easy to understand.

Technicality: Not too technical.

Provides Practical, How To Knowledge On: How inflation, hyperinflation or deflation can and may happen, and what you need to do now to protect your assets from such situations.

Summary: How To Protect Your Life Savings From Hyperinflation & Depression provides an extensive history on the occurrences of inflation, hyperinflation and deflation in our country and numerous others, forcing you to acknowledge these possible financial events as one of many future outcomes of our current economic situation.

John T. Reed explains (as most of us already know) that the current deficit and level of government spending are unsustainable and that although there is no way to know what the future may bring there are steps you can take now so that if a negative outcome occurs, you’ll be protected.

He says,

“Many books on this topic promise to tell you how to profit from inflation or deflation. In order to profit, you have to know in advance which is going to happen – inflation or deflation – and when. This is a book about management of the risks of unexpected high inflation or deflation.”

He does not propose you buy gold or many other traditional defensive measures. Instead he provides an action plan that includes paying off debts, creating liquidity, and making sure you are in a situation to have adequate food, clothing and shelter, and provides practical steps on how you can accomplish this.

I’ve always enjoyed John’s practical, no-nonsense style. This short excerpt will explain what I mean: There is a rule in statistics called regression toward the mean (average). It is defined as the tendency for people (or events) to move toward the average during the course of an experiment or over time. If you are going to buy gold, you need some objective standard for what’s a fair price. Its average, or mean, inflation adjusted price in 2010 is $615 an ounce. If you believe regression towards the mean, do not buy gold at its current real price of three times its past mean or average. (If you do) the question here is whether you are so profoundly stupid that you believe gold prices will regress to their peak.

Downside: John’s research on the subject was obviously extensive, but at times I found things to be a bit repetitive. I think all relevant points could have been made in a shorter, more logical sequence. Oh well, you can simply can skim over parts. The book is worth reading, and John’s recommended actions should be strongly considered.