The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country by Peter D. Schiff

Dec 01, 2012 Aaron rated it 5 of 5 stars · review of another edition

*A full executive summary of this book is available here: http://newbooksinbrief.com/2012/06/04...

Since the housing and financial crash of 2008 America's recovery has been tepid at best. Unemployment has remained high; manufacturing has not returned; personal savings are as low as they've ever been, and personal debt as high; housing is still a mess, and banking not much better; and, on top of it all, government debt is awe-inspiring and seems completely insoluble. According to financial investo...more *A full executive summary of this book is available here: http://newbooksinbrief.com/2012/06/04...

Since the housing and financial crash of 2008 America's recovery has been tepid at best. Unemployment has remained high; manufacturing has not returned; personal savings are as low as they've ever been, and personal debt as high; housing is still a mess, and banking not much better; and, on top of it all, government debt is awe-inspiring and seems completely insoluble. According to financial investor, commentator and author Peter Schiff, while all of this is certainly disheartening it should not come as much of a surprise. Indeed, Schiff argues that all of this economic slumping is a natural result of America's misguided economic policies; including especially the Federal Reserve's manipulation of interest rates, the government's uncontrollable borrowing, and, in connection with this, the maintaining (and even expansion) of unsustainable social programs . For Schiff, these same policies led directly to the crash of '08 (which he correctly and very famously predicted), and are leading the U.S. directly into an even worse crash now. In his new book `The Real Crash: America's Coming Bankruptcy--How to Save Yourself and Your Country' Schiff outlines how America got itself into this mess in the first place, what the end game is likely to be, and what we should do to make the coming unpleasantness the least unpleasant as possible.

The main problem--and where most of the other problems begin--according to Schiff, is the Fed's manipulation of interest rates. By interfering with the free market value of money, and making it cheaper than the market would dictate, the Fed encourages financial bubbles that then necessarily pop. When a bubble pops the market needs to correct itself; however, over the past 20 years, the Fed has not really allowed this correction to take place, as every time a bubble pops the Fed has lowered the interest rate even further, causing more money to enter the system and a new bubble to form. First it was dot-com stocks, then it was housing, and now it is government spending.

As a matter of fact, while government spending has reached new and mind-boggling heights in the recent past, it has actually been ballooning in this direction for years, spurred on largely by the low-interest rates that the Fed has provided. The government has used this borrowed money to establish social programs (such as Social Security and Medicare), and, more recently, bailout packages for failing businesses and entire industries. All the while, the government has been going deeper and deeper into debt. A big part of what has allowed the American government to borrow as much as it has (and to keep on borrowing now) is the fact that the American dollar is the world's reserve currency, which means it is always in demand, and hence people and organizations have been willing to act as creditors in order to get it. For Schiff, though, the sheer size of the debt, and the fact that it is running away faster and faster everyday (and has no realistic chance of ever being repaid) will sooner or later turn investors away from considering the American dollar a valuable reserve--at which point it will lose its status as the world's reserve, and investors will stop investing in it.

At this point, the American government will have but two options. It can either declare bankruptcy, or it can print the money it needs to pay its debt. In either case, an enormous crash will result, for in the first case, an astronomical sum of money that the economy had assumed existed will suddenly be wiped away, and in the latter case hyperinflation will set in, and the American dollar will be whittled down to worthless.

At this point we will be forced to start over. For Schiff, this may not be such a bad thing, for, according to him, we have simply put ourselves in an unsustainable position, and the sooner we start over the better. At that time, Schiff argues, we can finally get back to the small government and free-market forces that America's founding fathers designed the country around. While much of the book is focused around how we can do this now, before the crash hits (in such areas as banking & finance, taxation, healthcare, education, the military, immigration and the war on drugs et. al.), you get the feeling that Schiff thinks that the crash is actually inevitable, and that these reforms will have to take place after The Real Crash.

The book is very easy to read and the arguments laid out cleanly and concisely, and backed up with both theory and historical evidence (though a little more of the latter would have been nice, on occasion). The author has done well to bring libertarian views into the mainstream. A ful executive summary of the book is available here: http://newbooksinbrief.com/2012/06/04...
A podcast discussion of the book is also available. (less)

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Feb 14, 2013 Branden rated it 4 of 5 stars

Peter Schiff gets it.

I could have written this book. Probably not as well, but in an ideological sense, I have never heard someone espouse economic and political beliefs that mirrored my own so much.

Most of the policy changes he recommends will ever see the light of day, simply because the US of today is comprised of a government that is too big and covetous of it's own power, combined with a gutless and sheepish population that have grown up with the notion that government will always be there...more

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Dec 22, 2012 Paul DeBusschere rated it 2 of 5 stars

I bought this book because I found Mr. Schiff's boldness in proposing the elimination of entitlements in the USA to be refreshing and intriguing. His proposals to eliminate income taxes and entitlements were enough to compel me to buy the book. And on those issues, Mr. Schiff makes sound arguments.

However, Mr. Schiff then proceeds to throw the baby out with the bathwater. Unfortunately, he takes the all-too simplistic libertarian stance of "if less government is good, then no government must be...more I bought this book because I found Mr. Schiff's boldness in proposing the elimination of entitlements in the USA to be refreshing and intriguing. His proposals to eliminate income taxes and entitlements were enough to compel me to buy the book. And on those issues, Mr. Schiff makes sound arguments.

However, Mr. Schiff then proceeds to throw the baby out with the bathwater. Unfortunately, he takes the all-too simplistic libertarian stance of "if less government is good, then no government must be even better" while ignoring the obviously fallacious nature of his arguments.

There are too many to go into here, but this one is my favorite, spanning several issues Schiff tries to address. Over two or three chapters, Schiff tries to make the case for lowering wages, eliminating the Federal Reserve, etc. At the same time Schiff completely ignores the inevitable outcomes of these policies, which would include reduced asset values.

Amazingly, Mr. Schiff even conflates declining prices of commoditized products (due to gains in production efficiency and supply) by stating it is natural for prices to go down due to sound monetary policy. Even worse, Schiff, as an asset manager, completely ignores what would happen to asset values if wages were lowered and the dollar was deflated. The glaring fact is that asset values would crater (homes at 1/20 of their purchase values, wages a fraction of what they were, massive defaults on mortgages and business loans, and banks failing at a rate that will make the 2008 crisis look like a day in the park). The resulting unemployment would far outpace that of the Great Depression.

It's a shame Mr. Schiff and his ilk never talk about the consequences of their ideas. They are right to point people to a smaller government, but most often, they go too far by taking a simplistic and Pollyannish view of human nature and world we live in.

Despite Mr. Schiff's advocacy of the elimination of income taxes and entitlements, this is a seriously flawed book that ignores extremely damaging outcomes to our society and economy that would result from the other ideas the author supports.(less)

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Jun 13, 2012 Kim rated it 4 of 5 stars

Shelves: investments-in-a-bad-economy

For those who aren't familiar with Schiff's understanding of the economy I refer you to 2 things: 1) Schiff's book Crashproof (written in 2006) or Crashproof 2.0 (a copy of Crashproof but with commentaries after each chapter about how things played out in 2008). He wasn't just a "doomer" in predicting the 2008 financial crash; he explained why.
Secondly, he was recognized for his analysis by an economist, Bezemer, who wrote a paper "No One Saw This Coming." About a dozen other people were also r...more For those who aren't familiar with Schiff's understanding of the economy I refer you to 2 things: 1) Schiff's book Crashproof (written in 2006) or Crashproof 2.0 (a copy of Crashproof but with commentaries after each chapter about how things played out in 2008). He wasn't just a "doomer" in predicting the 2008 financial crash; he explained why.
Secondly, he was recognized for his analysis by an economist, Bezemer, who wrote a paper "No One Saw This Coming." About a dozen other people were also recognized (note no Krugman-type Keynesians understood, because their economics ideas don't allow for such realities).

If you read books/articles by all of the "predictors" of the 2008 crash, you will find that none of them think it has been resolved. The problems weren't about a few regulations; they are about inherently spending more than what we produce. Their solutions, though, are all somewhat different.

Schiff understands we have to get back to the norm: we as a society have to live on less than what we make to recover. How to do this as a "gentle landing" or "peel off the bandaid" is the source for debate. His ideas are thoughtful and most probably realistic in the economic sense. Unfortunately, I doubt they are politically palatable because politicians won't admit the trouble we are in until it is too late. So while I agree with his message, I look at the book primarily for how I might handle things as an individual.

I also found the appendix on the history of money interesting.

The only thing I question when reading his book is his outlook on China. It is more positive than I hear from other analysts, and I don't know if anyone can be certain about the data coming from China. It seems to me a lot of his predictions (particularly inflation) would change if China is not as strong as he thinks. Therefore, my main criticism of the book is that I would like to see him discuss how things would work out "differently" if China isn't as healthy as he thinks it is.

In short, I think this is an important book in understanding the economy and trying to decide where to place your own investments and protect yourself.(less)

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Nov 29, 2012 Jeff rated it 3 of 5 stars

Shelves: 2012

PROS: Instead of just explaining how things are wrong, he offers solutions and explains why he advocates those solutions. For example:

--Gun control makes us LESS safe, because criminals will be armed and law-abiding citizens won’t. Although kids are accidentally killed by guns, it’s not as many as the number of people who accidentally drown or die in car accidents. "Are we going to outlaw pools, beaches, and kids in cars, too? Many crimes are thwarted by gun owners and others never occur because...more

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Oct 24, 2012 Philomath rated it 2 of 5 stars

Shelves: contemporary-finance-and-economics

I would counsel anyone looking for a balanced, objective examination of the economic issues facing the country to look elsewhere. Schiff wears his ideological bias on his sleeve, and unfortunately a lot of what he says must be taken with a grain of salt.

While my myriad objections to the book I detailed below, my chief complaint is this: the book presents an inflammatory portrait of the American economy (not erroneous, see below) and is dotted with investment "tips" that may sound impressive to a...more I would counsel anyone looking for a balanced, objective examination of the economic issues facing the country to look elsewhere. Schiff wears his ideological bias on his sleeve, and unfortunately a lot of what he says must be taken with a grain of salt.

While my myriad objections to the book I detailed below, my chief complaint is this: the book presents an inflammatory portrait of the American economy (not erroneous, see below) and is dotted with investment "tips" that may sound impressive to a layperson, but are really just basic principles of maintaining a diversified portfolio that could be found on any personal finance blog. After priming his readers to a state of frenzy and teasing them with his investment "advice," Schiff invites his readers who "interested in implementing any of [his] investment strategies" to contact one of his various investment companies. Basically, the entire book is a 300 page marketing circular.

Morever, having expended below more words than I intended in reviewing this book, let me just say up front that there are a few gems here and there, but they require a reader to carefully sift though a lot ideology-driven droning. In the final analysis, the problems identified and solutions advanced are dealt with elsewhere (and much better) by other authors. I would direct a reader to check into writings by conservative economists like Glenn Hubbard instead of wasting their time on this book.

Now, onto (some of) my other issues with the book: while Schiff does point out extant problems in the U.S. economy (ex., government policies promoting the housing bubble, the debasing of the currency through the Fed's activist monetary policies, over consumption and price insensitivity in the healthcare market due to Medicare/Medicaid and tax subsidies for employer provided insurance), these problems are obvious and, contrary to his self-lauding statements to the contrary, Schiff was by no means the first person to pick up on them or the most insightful.

In examining these problems, Schiff's analysis is incomplete as his ideological blinders lead him to ignore salient aspects of the problems that don't fit within his philosophical view. For example, in trumpeting about the easy money provided by the Fed and the loan guarantee by gov't GSEs that led to the housing bubble, Schiff largely absolves the private actors who freely capitalized on these distorted incentives and downplays the role private choice to employ overleverage, unregulated opaque credit derivatives, and "synthetic" products played in turning a crisis in a relatively small sector of the mortgage market into a global near-meltdown, and conveniently forgets that the moral hazards of FDIC-insured bank engaging risk taking behavior was phenomenon created by deregulation lifting the ban on FDIC-insured institutions engaging in such activities. Basically, Schiff is the counterpart to those rabid liberal economists who can only scream about corporate greed while neglecting the government actions which, though often well-intentioned, made it possible.

Moreover, Schiff displays a tendency to present skewed (if not outright inaccurate) pictures of American monetary and constitutional history (particularly on the issue of taxes, which is no surprise given his father is the patriarch of the tax protestor movement). He also has a tendency to sidestep opposing alternatives that he appears to be unable to argue effectively against. For example, he admits that socialized health care in nations such as Canada result in lower costs per capita and better outcomes than our current system (for example, Canada has lower infant mortality and higher life expectancy, a higher doctor to patient ratio) but doesn't present any compelling evidence as to why his proposed solutions would lead to a superior outcome than those systems.

As a work of scholarship, the book is, well, suspect. Leanly sourced, Schiff tends to make grand conclusory statements (often following fallacious reasoning and false analogies) without factual support or empirical research. His solutions are simplistic, and generally come down to "shred all regulation." Yet in articulating his solutions Schiff shows a tendency to confuse the sort of micro-level burdensome, costly, micromanaging regulations that are legitimate target of criticism and the macro-level regulations that, as Milton Friedman would put it (no commie he!), provide the "rules of the game" that ensure that markets stay free, open, transparent and competitive. He seems to forget that shredding regulation would not fix the structural issues and free rider problems in the insurance market, and that "wild west" lawless markets, like the Chicago stock exchange of yore, perform much more poorly than markets like the NYSE which have a stronger rules-based regime.

His solutions are also of limited value as he fails to address obvious criticisms or consequences. For example, he states all disclosure regulations should be abolished, and naively says that any company that doesn't provide investors with information would find itself as a disadvantage in the marketplace. Unfortunately, in doing so he ignores the litany of scholarship showing that strong disclosure regimes promote transparency and ensure that transactions are entered into on an informed basis. He even undermines his own argument later by raising the specter of Bernie Madoff, who succintly showed that you could be incredibly secretive and withhold information blithely, yet still garner billions in investment. As for consequences, he makes a simple statement that environmental regulations should be abolished, too. An obvious consequence here can be pointed at China, where a lack of regulations has lead to the pollution of 80% of its freshwater (and attendant illnesses like widespread lead poisoning and digestive cancers) and near-omnipresent toxir air pollution (and attendant respiratory illness). It's estimated that health costs of pollution exceed $100 billion per year, and will have long-term economic consequences to the labor supply that will take years to be fully realized. He is also woefully blind to social costs and inequalities, issues of negative externalities and trends toward private sector underinvestment in areas like infrastructure and long-term R&D lacking in immediate commercial value.
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Oct 18, 2012 Dan Raymo rated it 2 of 5 stars

Having recently read Paul Krugman's, End This Depression Now!, and finding myself in more or less agreement with most of it, I was looking for the conservatives' take on our economic problems. After a month-long battle with Ayn Rand's, Atlas Shrugged, I eventually came across The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country by Peter Schiff.

Most of my friends consider me to be a "pinko leftist", and they're probably right (or maybe I just run with the wrong cro...more Having recently read Paul Krugman's, End This Depression Now!, and finding myself in more or less agreement with most of it, I was looking for the conservatives' take on our economic problems. After a month-long battle with Ayn Rand's, Atlas Shrugged, I eventually came across The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country by Peter Schiff.

Most of my friends consider me to be a "pinko leftist", and they're probably right (or maybe I just run with the wrong crowd,) but I've always agreed with a lot of conservative beliefs and like to think I'm objective enough to hear out opposing arguments. Of course these days, the opposing arguments usually consist of random shouts of "Obama", "Socialism", and ultimately, "well business can't operate under conditions of uncertainty"; so it was good to find that Schiff provided a lot of thoughtful arguments for his beliefs. I found myself agreeing with him on lot of what he felt was causing our problems, but not on many of the solutions.

Pretty much every solution was the same...such and such is broken...get rid of it. In effect, throwing the baby out with the bath water. This blind conservative belief that the invisible hand of the "free-market" will solve all issues is absurd. We don't have to guess what unfettered capitalism will look like – we know – we've seen the economic meltdowns, we've seen the rivers so polluted that they caught fire, we've seen the child-labor, the swindles, the corruption, and on and on.

In most cases he calls upon ridiculous examples to prove his case, thereby avoiding the real arguments against them. He proposes getting rid of all government licensing, and as an example tells of a Louisiana law requiring florists to be licensed, saying if you don't like the flowers, just don't go back. This may be a good example of special interest groups having too much influence in law creation, but a ridiculous one for his point. Does he really want an unlicensed brain surgeon or pilot? What happens when you don't like the brain surgery or the way the pilot flew into the side of the mountain? He tries to take advantage of our 30 second attention span, by showing us ridiculous examples, and hoping we'll have been convinced and moved on before we've realized the inherent problems with them.

On healthcare his arguments were equally weak. On pre-existing conditions, he says if all insurance was held to that, "...you could call Allstate while your house was burning and get insured for fire damage." Of course healthcare isn't anything like that. Even people with insurance can (and do) have their newborn child refused if born with a health problem. In supporting that healthcare should be completely privatized, he says, "You would shop more for health care. Doctors and other providers would have to start competing on price." I can't wait to start shopping around for my emergency appendectomy. The idea that a healthcare is best served by profitability is absolutely absurd.

He uses facts and history where convenient, and completely ignores them any other time. He says of the 50's, "At the time Americans enjoyed a living standard unmatched anywhere else in the world. Limited government maximized freedom and economic growth." Really? We had the highest marginal tax rates in our history (92%) and the toughest banking regulations.

I started out liking this book, but by the time I was done I was ready to shred it. He is an intelligent man who is quite knowledgeable, but his love affair with capitalism is religious in nature – he follows it with blind faith, disregarding facts, history, science and even his own common sense when they conflict with its dogma. I could go on and on, as he covers just about every social ill in this book, but the final straw was his take on gay marriage, "If you're gay and you want to be married, move to a state where most people agree with you on this."
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Jul 22, 2012 Julie Marsh rated it 3 of 5 stars

How interesting that I finished this book as the LIBOR mess is unfolding.

This book includes a lot of stuff I agree with, and a lot of stuff that's specious. Schiff absolves actions of corporations and banks with the excuse that they're merely following the government's lead. Business is equally corrupt as government; at least government acts under the auspices of improving everyone's situation, not just executives and the largest stockholders. The free market is not the cure-all Schiff (and Ron...more

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Jan 20, 2013 Jeremy rated it 4 of 5 stars

So basically this is what I got out of this: Invest in...
+ Raw materials
+ Agriculture
+ Dividend-paying stocks in companies that sell to growing markets abroad (not necessarily American companies who do so as they may incur burdensome taxes for their efforts)
+ Currencies of: Australia, Singapore, Hong Kong, New Zealand, Switzerland, Norway, the Netherlands, Canada, China.
+ Short-term, nondollar bonds
+ Gold

Quotes:

Whenever people credit me with calling the crash, it pains me to tell them that what...more

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May 02, 2013 Michele Defilippo rated it 4 of 5 stars

If you thought 2008 was bad, you ain't seen nothing yet. In this frightening book, Peter Schiff brings home the full magnitude of our fiscal crisis, how we got here, and how intense the coming "real" crash will be, no matter what our leaders do next. The decades-long spending spree by both parties is coming to an end. The only choice left is whether we, or outsiders, will control the crash landing.

Schiff offers a long list of solutions that are politically impossible, such as the elimination o...more

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Aug 17, 2012 Lisa Cindrich added it

On the dollar as the world's reserve currency:
"As a foreign country, you're willing to take dollars because you know some other country will be willing to take dollars. That other country will take dollars because some third country will take dollars. If this sounds familiar, it's because we've seen it before [dot.com stocks, real estate flipping]...This is only slightly different from a Ponzi scheme. It all depends on the existence of a greater fool. Eventually you run out of fools and the bubb...more

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Jul 02, 2012 Serge Boucher rated it 2 of 5 stars

Despite the low rating, I actually really enjoyed reading this book. It's a super-interesting read, if you actually know a few things about economics and enjoy fishing logical mistakes and questionable (often hidden) assumptions in a superficially convincing argument. While Peter Schiff is right about some things (his libertarianism on social issues is well-placed and his arguments are sound) and more intellectually consistent than most pundits (admittedly a low bar), his economic model remains...more

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Jan 21, 2013 Alex rated it 4 of 5 stars

Despite the rather noxious title the book is actually quite good. It is pretty far to the right when it comes to economic/public policy, but at the very least one should be aware of the alternatives he proposes when it comes to fixing Medicare, Medicaid, Social Security, tax structure, college costs, unemployment etc. And yes, his approaches are grounded in pro-free market, austrian-inspired framework.

Again, you don't have to agree, but dont fall for keynesian confirmation bias induced by the ma...more

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Mar 03, 2013 James rated it 4 of 5 stars

Peter Schiff, the author, was one of the few people in the world that predicted the the 2007/2008 housing financial collapse (over and over and over again), and many of the articles he wrote in 2006 read more like they were written in 2013, a fact he is well aware of.

In this book, he argues that the same policies and governmental actions that allowed him to predict the earlier financial collapse are not only still in place, but even moreso than in the original case. Thus comes the book's title,...more

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Apr 20, 2013 SteveR rated it 3 of 5 stars

Shelves: investing-finance

Some of the political views of this author may be radical. Certainly contrary to our current administration (i.e. far less government). But the economic message is clear and disconcerting. He says, "Although we (the US) are bigger and more economically integrated than Greece, our disease is identical [i.e. overspending, entitlements and borrowing] ... We are on the precept of an even greater crash that could be worse then the Great Depression." Therefore, how investors respond must be unique and...more

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Sep 24, 2012 John Jeffcoat iii rated it 5 of 5 stars

Peter Schiff has done it again. This book provides an extremely detailed historical look at "The Big Picture" of the global economy, the national economy, and our society's psychological approach to finances and investments and money. Then, it reveals keen insight into where things are inevitably heading in the next few years, why the path ahead is unavoidable (regardless of who is in governmental leadership), and what the intelligent person should do to help safeguard their future, and not repe...more

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Aug 29, 2012 Michael rated it 2 of 5 stars

In this book, Peter Schiff explains what he he believes are the causes of America's financial crisis and the drastic measures he believes we should take to solve them. I agree with him on several points he makes. I agree with him that:

Social Security is a legalized pyramid scheme.

Going off the gold standard and allowing the Federal Reserve to create fiat money devalues the whole money supply.

Excessive government regulation hinders job creation, business growth and energy independence.

Our foreign...more

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Nov 10, 2012 Marshall rated it 2 of 5 stars

Shelves: economics, non-fiction, politics

This book is supposed to be about the "real crash" that is coming, following the 2008 recession. He spends exactly 52 pages on this. The other 300 pages is basically one long political rant.

The government and the people are both wracked with unprecedented levels of debt, that will soon because unmanageable. The government can't even afford to pay the interest on this debt; it merely borrows more to pay the interest. When the time comes to pay the piper, the government will be unwilling to make t...more This book is supposed to be about the "real crash" that is coming, following the 2008 recession. He spends exactly 52 pages on this. The other 300 pages is basically one long political rant.

The government and the people are both wracked with unprecedented levels of debt, that will soon because unmanageable. The government can't even afford to pay the interest on this debt; it merely borrows more to pay the interest. When the time comes to pay the piper, the government will be unwilling to make the politically unpopular hard choices, so they will resort to monetizing the debt by printing money, which will lead to hyperinflation and, inevitably, a return to the gold standard. It's the same "fiscal cliff" talk you hear on networks like Fox News. Nothing new here.

The solution? Simple. Eliminate the income tax, eliminate corporate taxes, eliminate social security, eliminate medicare, eliminate the minimum wage, eliminate unemployment insurance, eliminate regulations, eliminate FDIC, eliminate the SEC, eliminate the Federal Reserve, return to the gold standard, eliminate college subsidies, eliminate student loans, eliminate public schools, repeal ObamaCare, eliminate the FDA, eliminate HUD, eliminate the Dept. of Health and Human Services, eliminate the Department of Labor, eliminate the Department of Commerce and Transportation, eliminate the Department of Education, eliminate the Department of Agriculture, eliminate the Department of Energy, eliminate the Department of Homeland Security, eliminate the Department of Veterans Affairs, legalize drugs, legalize prostitution, legalize gambling, eliminate abortion regulation, eliminate gun control, eliminate energy subsidies, eliminate the EPA, and declare bankruptcy and default on the national debt.

Whew. I sure hope I didn't miss anything. He's pretty over-the-top, but it's actually the best articulation of libertarian / Austrian economics I've seen yet. This book really challenged my liberal perspective. His errors were obvious, which helped me identify exactly what the problems are with this economic philosophy. But the rest of the time, he actually made many great points, and forced me to re-think my views somewhat. That's all I ever ask from any book. He also gives a few good investment tips.

That said, this book is not really about "the next crash." It's almost entirely about libertarianism, so it should have been titled as such. It's also lacking in evidence. There are no sources to support any of his claims, so it's really just some guy spouting his opinions.(less)

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Jan 03, 2013 Jbunn rated it 2 of 5 stars

This is a mixed bag. In the first part of the book, Schiff argues that the monetary policies of the Federal Reserve have contributed to a series of three consecutive bubbles: the dot-com mania, the housing/credit boom-bust, and now, an unsustainable bubble in government spending which will result in "the real crash" indicated in the title.

Schiff spends many pages harping about the role played by Fannie/Freddie, the FHA, deductibility of mortgage interest, etc. No doubt these were contributing fa...more This is a mixed bag. In the first part of the book, Schiff argues that the monetary policies of the Federal Reserve have contributed to a series of three consecutive bubbles: the dot-com mania, the housing/credit boom-bust, and now, an unsustainable bubble in government spending which will result in "the real crash" indicated in the title.

Schiff spends many pages harping about the role played by Fannie/Freddie, the FHA, deductibility of mortgage interest, etc. No doubt these were contributing factors to the housing bubble, but as far as I know, none of them can explain why there were even bigger booms in many other countries around the same time, a fact that he doesn't even mention in the book.

This lack of global perspective seems surprising coming from an author who advocates investing primarily outside of the US and whose thesis is that the US government is so much more screwed up than most that it's going to collapse the economy. He almost never discusses how other countries do things compared with the US (which could have been a very interesting book), instead preferring to spend many pages offering "solutions" that are obviously never going to be enacted, such as eliminating the income tax.

The second, longest part, consists of Schiff's outline for solving the various problems he sees as caused by government spending. This is mostly along libertarian/Austrian school lines: government bad, free market good. Some of his arguments are pretty good, others (even ones I agree with) are poorly justified with statements such as "if we eliminate such-and-such program, I think the result would be...", without any evidence or logical arguments to back them up.

His chapter on Social Security was especially poor, boiling down to a multi-page tirade amounting to "I think it's a Ponzi scheme, and unconstitutional" when obviously the courts have decided otherwise. Everyone agrees that the program is underfunded, but he immediately concludes that this means the program should be scrapped, failing to address obvious alternatives such as increasing taxes or decreasing benefits to achieve balance.

His chapter on education was quite good and thought-provoking. I don't think he came up with any of the ideas, but he does synthesize a good argument that we send too many kids to college, with poorer economic results as tuition and student loan balances spiral out of control, and that much of the blame for this rests with taxpayer-subsidized loans.

There are other chapters on health care (more "government bad, free market good" rhetoric, not very convincing in this case), and on the financial industry ("too much regulation" is the best he can come up with in the aftermath of the 2008 meltdown?), as well as a rather tiresome chapter on returning to the gold standard.

The third part, ostensibly the whole point of the book, discusses what investors should do to prepare for "the real crash." This part is laughably short and vague: buy gold, and invest with Euro Pacific Capital.

In general, I like Peter Schiff. It's entertaining to watch his various YouTube videos, especially the one where he defends capitalism during an Occupy Wall Street rally. I agree with his main points: (1) government spending is unsustainably high, and despite lip service to the contrary, neither party is going to do anything to change that until forced to do so by the bond markets; (2) our version of "capitalism" is deeply flawed because it bails out banks and other actors who make bad decisions; and (3) you shouldn't invest all your money in the US (or any other country).

But this book is a mess. It's more like a collection of rants, of varying quality, about what Schiff doesn't like about the government than a coherent thesis spelling out the case for why he believes a crash is coming and what to do about it. The latter is what I expected, based on the title. He has some intelligent things to say, but overall it's just Schiff calling for less government, hardly a novel perspective.(less)

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Jul 26, 2012 Matthew rated it 4 of 5 stars · review of another edition

Shelves: economics, politics, business

Amongst all of the pundits, authors, and talking heads out there few give real solutions to our national problems. Peter Schiff isn't one of them. The Real Crash is all about how to fix our broken system and get us out of debt. Many of the solutions he mentions are regulatory reforms, many of which I agree need to take place. The biggest reform, and one that I agree with wholeheartedly is tax reform. I have read in other places that the income tax is illegal and unconstitutional and here Schiff...more

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Sep 07, 2012 Michael rated it 4 of 5 stars

Probably the best book for a case by case discussion on eliminating most gov't programs and what the results would be (cause/effect). I think the author is obviously biased (right) and does little to assail the massive GOP spending of the past decade. That said, fans of Ayn Rand, will find this a good book to help their cause or discussion for limited and effective gov't. I think there is almost NO CHANCE any of these ideas will see the light of day.

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Sep 05, 2012 Jason M. rated it 4 of 5 stars

Straightforward, logical view of the state of US finances. He doesn't throw punches and tells it like he sees it which you can take or leave. He has recommendations for how to weather the coming inflation storm which he sees as a result of the Feds actions and he has plenty of blame to pass around for how our nation arrived at this moment. In my opinion, Mr. Schiff loves our country.

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Aug 08, 2012 David rated it 2 of 5 stars

This book was a disappointing waste of time. None of the policies outlined were practical and the advice was stupid. For example Schriff actually recommended that people buy in bulk now to avoid hyperinflation. I read this book along with Paul Krugman's "End This Depression Now" and was surprised that a book advocating more debt was more useful in understanding current economic issues.

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Jun 30, 2012 Joseph Hopkins rated it 3 of 5 stars

Most of the book is spent re-hashing Schiff's mostly Austrian-school/libertarian views on how to solve the unfathomable financial mess the US government finds itself in. So I didn't get lots of new info in the "Solutions" section of the book.

But Schiff's advice on how to hedge your personal portfolio against the crash that will come when the political process' failure is complete (and our credit dries up, and the dollar loses its status as the world's reserve currency) is worth the price of admi...more

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Dec 17, 2012 Jeremy Wise rated it 5 of 5 stars

Shelves: business-must-read

Peter does an incredible job describing where we are at financially as a country, how we got here, and what it will take to right the ship. His honesty and bluntness are a refreshing change from the typical Washington politicians who refuse to deal with the real crises we're facing.

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Oct 03, 2012 John rated it 4 of 5 stars

I have been following Peter Schiff for years. For a long time prior to the financial meltdown in 2008, he was one of the few voices of sanity in the media, constantly warning people about the impending housing bust and the even greater threat brought about by the Federal Reserve's determination to print trillions of dollars out of thin air. He was often derided by this contemporaries but he stuck to his guns and was proved right.

In this book, he offers a vision of what the US needs to do to refo...more

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Jul 25, 2012 Michael Mowad rated it 4 of 5 stars

Great book on why we are in the mess we're in, but I expected more advice on how to prepare for the inevitable bankruptcy of our country. If you want to understand our deficit spending, read this book. Also, it was a little too politically skewed.

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Feb 04, 2013 Mikko Arevuo rated it 2 of 5 stars

Shelves: economics

A no-nonse book about the forthcoming crash as a result of US government indebtedness. Peter demonstrates sound economic thinking for a generalist reader. The prose is slightly hectoring, but I am sure that was his intention.

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Aug 26, 2012 LasVegasBookie rated it 3 of 5 stars

Read this book. If the poor editing doesn't drive you crazy, then thank the heavens for the poor education you probably received post-1970. Overall, though, I think the information gained is well worth the effort.

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Jun 10, 2012 Tamarack rated it 5 of 5 stars

The first part of the book was excellent and to the point. I found myself having to force myself through some of the subsequent chapters but I am very glad I did. A serious and important read.

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