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The Coming Economic Earthquake
Old 11-01-2008, 07:23 PM   #1
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The Coming Economic Earthquake

Was woundering if anyone has read the book "The Coming Economic Earthquake" by Larry Burkett? I just did and I am having a hard time getting the message out of my mind.

It deals with out of control spending by our government as well as individuals and the inevitable out come of spending beyond their means continually for many years.

The book was writen 17 years ago but the events fortold sure do look a lot like what is going on today. He talks of our government printing money in the end as a last resort to try to correct the economies dire condition.

The end is a colapse of the dollar due to what he calls hyperinflation which he states has happened in other smaller countries. I guess the good point for most of us on this board is the stament he makes that those who have thier homes paid for at least will have more years to fight off the wolf at the door.
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Old 11-01-2008, 07:37 PM   #2
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Free Money Finance: The Economic Earthquake of 2008; Implications, Vulnerabilities and Aftershocks

Book Review: The Coming Economic Earthquake by Larry Burkett| The Foundation for Economic Education: The Freeman, Ideas on Liberty


What did he say in the book an individual should do?
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Old 11-01-2008, 07:41 PM   #3
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inflation is great for debtors and bad for those in no debt
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Old 11-01-2008, 07:59 PM   #4
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I'll get worried when black markets in hyperinflation countries stop using US dollars.
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Old 11-01-2008, 08:25 PM   #5
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Dex , His advice if I can parafrase is first to get out of debt. Stop spending on credit. Encourage our government to also stop spending beyond what it is taking in and start to pay off the national debt and act responsibly, which he doubts will really happen. Personal advice for those retired already is to seek training in skills that would be readly marketable in the event of a major colapse. So going back to work as an electrician, carpenter or gardener or something. Also he says to diversify some of your funds in at least 7 international markets not for gain but for security. He believes not all curriencies will be hit as hard so I guess you will have at least some of your buying power saved.
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Old 11-01-2008, 08:44 PM   #6
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Dex , His advice if I can parafrase is first to get out of debt. Stop spending on credit. Encourage our government to also stop spending beyond what it is taking in and start to pay off the national debt and act responsibly, which he doubts will really happen. Personal advice for those retired already is to seek training in skills that would be readly marketable in the event of a major colapse. So going back to work as an electrician, carpenter or gardener or something. Also he says to diversify some of your funds in at least 7 international markets not for gain but for security. He believes not all curriencies will be hit as hard so I guess you will have at least some of your buying power saved.
Thanks,
Take a look at some of my economic posts - they are similar to what he said - except the skill part.
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Old 11-01-2008, 08:50 PM   #7
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I havent read the book, but it sounds like our goverment should!
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Old 11-01-2008, 09:07 PM   #8
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I read the book when it was first published in the early 90's. The exponential growth of the national debt he outlined has taken a bit longer than he predicted, but he made some valid points about the dangers of runaway spending on both a national and a personal level.
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Old 11-01-2008, 09:30 PM   #9
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The problem is that increasing debt is baked into the cake of pretty much any banking system historically conceived. Crashes and monetary collapses seem to serve to "re-set" this to some extent -a chunk of wealth gets transferred from the savers back to the debtors- so the game can continue. This can happen through inflation or currency devaluation or taxation or dilution of equity shares or outright loan cramdowns that we may soon see in the housing arena. Or a combination of these. Or other means that I've forgotten.

The part about skills would be especially helpful in a deflation (kind like what's happening now) where the only "asset" that doesn't risk losing quite a lot of its value is a paying job, if you can keep it.

I only wish I had the money to pay a gardener to do everything that's needed around here! Probably will invest in a book on pruning instead.. :-)

Sounds like an interesting book and one that I wish I'd read when it came out. One of the people I've been following who seems to be in the inflation camp is Peter Schiff. He's got some pretty wild past video clips where he tries to beat some sense about runaway debt and spending into the usual TV bobbleheads.
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Old 11-02-2008, 01:23 AM   #10
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Yes inflation ruins wealth and erases debt.

When our govt runs a war we take on huge debt... not to mention cutting taxes and running a huge debt (compounds the problem).

What most do not realize is that the capital gains tax benefits the extremely wealthy more than retirement savers... most retirement savers have tax deferred savings (income tax due not cap gains).

It is common for inflation to erase the debt.

We could be in trouble.

GWB has raised federal debt to massive levels.

Consumer debt is huge also. Free money.

You loan money (because you save)... banks and institutions loan that money out to people who over extend themselves and cannot pay. The govt lowers interest rates and keeps them low. Inflation kicks in. The money owed back to you is worth less.

THe debt will be paid in 3 ways. The debt can be paid back (by tax payers and consumers), someone can default (consumers), or inflation can erase debt (govt printing money and keeping rates low). We will get all three. But your money will have less spending power.
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Old 11-02-2008, 09:51 AM   #11
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Dex , His advice if I can parafrase is first to get out of debt. Stop spending on credit. Encourage our government to also stop spending beyond what it is taking in and start to pay off the national debt and act responsibly, which he doubts will really happen. Personal advice for those retired already is to seek training in skills that would be readly marketable in the event of a major colapse. So going back to work as an electrician, carpenter or gardener or something. Also he says to diversify some of your funds in at least 7 international markets not for gain but for security. He believes not all curriencies will be hit as hard so I guess you will have at least some of your buying power saved.
last week there was an argument on CNBC between 2 of the anchors. Bob Pisani and Steve Liesman about an interview with a former Fed governor back in the 1990's. Supposedly when they stopped with the 30 year T-Bills it caused a lot of problems and the current bear market is one of the results
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Old 11-02-2008, 11:08 AM   #12
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Supposedly when they stopped with the 30 year T-Bills it caused a lot of problems and the current bear market is one of the results
I think - not sure - that is because the shorter term bonds had lower rates so it fueled the housing bubble.
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Old 11-02-2008, 11:16 AM   #13
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High future inflation is a great reason for not paying off your mortgage. Then you can pay it off with that worthless govt. paper they're going to be printing like crazy.

I'd be a little more worried about inflation (after possible shorter term deflation) if the entire world wasn't in the same boat.
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Old 11-02-2008, 04:19 PM   #14
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The history of governments is that everywhere and always, the long term trend is toward inflation. It is deliberate; a tax that many taxpayers do not see.

Certainly there are vicious deflationary reversals, but if you want to get rich, bet on inflation. Try to do it is a way that doesn't leave you out on a limb during the snapbacks.

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Old 11-02-2008, 06:15 PM   #15
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last week there was an argument on CNBC between 2 of the anchors. Bob Pisani and Steve Liesman about an interview with a former Fed governor back in the 1990's. Supposedly when they stopped with the 30 year T-Bills it caused a lot of problems and the current bear market is one of the results
As much CNBC as I've watched lately, Im surprised I missed this. This is something I've harped about. My understanding was that it created problems for large long term investors like pension funds. The 30-yr went away because the Fed Gov did not need it anymore, but these investment portfolios had become reliant on it. It became more difficult for them to fund thier pension account, but I'm not sure about the link to the current crises ( unless the void was filled with toxic debt).
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Old 11-02-2008, 06:27 PM   #16
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As much CNBC as I've watched lately, Im surprised I missed this. This is something I've harped about. My understanding was that it created problems for large long term investors like pension funds. The 30-yr went away because the Fed Gov did not need it anymore, but these investment portfolios had become reliant on it. It became more difficult for them to fund thier pension account, but I'm not sure about the link to the current crises ( unless the void was filled with toxic debt).
Perhaps because pension funds couldn't rely on the higher yields offered by 30 year bonds anymore, they went fishing for higher yields elsewhere, like mortgage backed derivatives and other toxic products... I don't know for sure, just thinking aloud.
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