ALAMO, Calif., June 21 /PRNewswire/ -- How to Protect Your Life Savings from Hyperinflation & Depression, by John T. Reed was released today. (320 pages, 8 1/2 x 11 paperback $34.95)
Everyone from Limbaugh to Obama says projected deficit spending is "unsustainable." But few say what happens when it stops.
Author Reed does tell what will happen to us when the world bond market says "No thanks" to Treasury auctions. Many books talk about what government should do. Reed wastes little space on that. "They aren't going to stop the insane borrowing. There is no grown-up in Washington protecting you. You have to be your own grown-up."
Reed's research produced surprising conclusions. Depression is another word for deflation. Which assets and liabilities you have when the 'flation hits the fan makes all the difference. Past episodes of inflation and deflation have made many millionaires poor almost overnight. But others were unscathed. Hyperinflation turns some relatively poor people into millionaires. Reed tells readers the right assets to own, which to get rid of, and which liabilities to pay off.
Reed also was surprised to find that most things people think protect them against inflation are ineffective: including precious metals, Treasury Inflation-Protected securities (TIPs), cost-of-living clauses, mindless diversification; FDIC and other types of insurance. Reed says, "In hyperinflation, the horse-and-buggy consumer price index, and things tied to it like TIPs bonds, are about as useful as an abortion clinic with a 10-month waiting list."
What about stocks and real estate as hedges against inflation? Reed found they took forever to recover to prior levels in past depressions and hyperinflation periods — so long that neighborhoods went bad, property types became obsolete, and corporations shrunk or disappeared. "Don't buy Procter and Gamble stock," says Reed. "Stock up on Procter & Gamble products you'll personally use in the future."
"We cannot predict whether we will get hyperinflation or depression." Reed's final chapter is a 9-point action plan to survive either. "This is not how to get rich from hyperinflation or depression like most books on those subjects. It is how to keep what you've got when all about you are losing what they had."
Reed is a West Point graduate, a Harvard MBA, and author of more than 20 books on investing.
SOURCE John T. Reed Publishing