Book Review: The Ultimate Depression Survival Guide

My friend and colleague, Dr. Martin Weiss, wrote an excellent book last year which rapidly climbed the best-seller lists.  The title is both lengthy and provocative: The Ultimate Depression Survival Guide: Protect Your Savings, Boost Your Income, and Grow Wealthy Even In The Worst Of Times.  As you might suspect, Martin is not often accused of wearing rose-colored glasses.  Yet he is more optimistic than the book’s title suggests, and offers much useful advice for serious and casual investors alike.

When I first read the book, the world was still in the midst of the 2008-2009 financial crisis.  I thought it offered solid advice, but I was second-guessing myself, thinking perhaps I was just caught up in the panic that was gripping the nation and the world.  So I recently pulled it down from the shelf and read it again, this time without needing to offset the strong emotions so prominent during the crisis.  And you know what, it makes even more sense now!

The first page of the first chapter gives away Martin’s economic forecast.  In his view, a second Great Depression is inevitable.  The culprit: staggering amounts of debt, both public and private.  The unsustainable housing bubble could not last, and the resulting implosion will give us years of economic stagnation.  Martin’s question is not whether we will have a depression, but how bad it will be.  The parallels he draws to the 1929 crash and the Great Depression are chilling.

Unlike many other analysts, Martin is less concerned about inflation than deflation.  If you are heavily in debt – which our society most definitely is – inflation is actually helpful.  You get to pay off your debt with depreciated dollars.  Deflation means the opposite, and the combination of heavy debt and price deflation is deadly.

Martin advises,

 ”Debt alone is usually tolerable.  People can pile up debts year after year, and as long as borrowers have the income – or as long as they can borrow from Peter to pay Paul – they continue making their payments.  Life goes on.

“Deflation – falling prices and income – is also not all bad.  It makes homes more affordable, college education more achievable, a tank of gas easier to fill.

“It’s when the debts and deflation come together that the wheels are set in motion down the path to depression.  That’s what happened in the 1930s, and that’s what’s beginning to happen this time as well.”

Martin goes on to explain in clear, concise language the implications for real estate, stocks, bonds, banks, currencies and more.  Every chapter includes practical tips on how to protect yourself and even thrive in any depression.  The book ends on a hopeful note; he explains how the difficult times will force all of us to adapt new and better habits.

The Ultimate Depression Survival Guide is a quick read, at just over 200 pages, and is available through many sources.  Additionally, Martin has generously agreed to donate all his royalties to charity.  I highly recommend it, especially for beginning investors and others who feel overwhelmed by the financial news.  If Martin is right, the time to protect yourself from depression is now.  This book tells you exactly what to do and how to do it.

Disclosure:  My company has a consulting agreement with Weiss Research and I am the editor of one of their publications, International ETF Trader.  I am also a regular contributor to their Money & Markets newsletter and web site.