In the midst of the "Demise"
Imagine a United States of not too long ago, basking in the glow of an unprecedented housing boom thanks to George W. Bush's "ownership society" and Alan Greenspan's everyday low interest rates. Into this blissful scene steps an author who says the boom is artificial and the value of the dollar is due for a heavy fall.
That was the world of 2005 when Addison Wiggin published The Demise of the Dollar… and Why It's Great for Your Investments. Seen from the perspective of 2008, it's pretty darn prescient.
This week brings the publication of a second edition, with a freshened subtitle (Why It's Even Better for Your Investments) and a text that's been significantly revised and updated now that we're in the midst of the events he forecast.
There's new analysis of Ben Bernanke's helicopter drops during his tenure at the Federal Reserve, and an updated review of the threats posed by both the budget and trade deficits.
It's no exaggeration to say the original edition changed my outlook on the trade deficit. Time was I thought, "Trade deficit? No problem." But as Addison points out, there's a difference between a healthy trade deficit — one that fuels capital investment, such as the United States had for much of the 19th century — and one that fuels consumption, such as we're experiencing today. Not that the present situation is an argument for protectionist measures, though; that's the trap I once fell into. You can forcefully argue the Cobden and Bright case for free trade without bashing everyone who expresses concern about the trade deficit as either a covert or overt protectionist.
Bottom line: If the book is new to you, it's well worth your time. And if you're already familiar with it, the new edition has a whole lot you haven't seen before. You can follow this link to pick it up from Amazon at a special discounted price.