The New Great Depression ... Really?
Updated: May 19
“In the fullness of time, the 2020 lockdown of the U.S. economy will be viewed as the greatest policy blunder ever. Lost wealth and income will be measured in trillions of dollars. Any gain in lives saved or damage avoided was inapposite, since equally effective policy choices were available but untried. There’s no evidence that epidemiologists considered lives lost to drugs, alcohol, suicide, and despair when they pursued policies that pushed 60 million Americans out of jobs.”
And on that note, we dive into James Rickards' The New Great Depression, graciously sent to me by Portfolio Books and my April finance read.
How are you feeling after that one? Honestly, this book left a bad taste in my mouth. Everything about it felt like clickbait, including the title, and focused on a few key principles (which you wouldn't have expected in a book about the economy). One, the virus is the Chinese virus. This was a manufactured virus released by the Chinese to cripple economies around the world. I'll let that sink in (perhaps you actually follow this belief).
This book was written last year, but published in January, and James has gone ahead and claimed that this will single-handedly be the greatest depression the world has ever seen. The evidence he has seen in between March and September was enough for him to call it. Don't even bother; get out there and invest everything you have in gold because we will soon be shaving our gold bars to pay for goods and services.
It's frankly hard to read a book like this and try to take anything positive out of it. In some aspects Rickards was correct. The world did go into lockdown and create economic hardship around the world, but after the book was written, it's also showing incredible resilience and an ability to bounce back. The modern, interconnected world we see today has never experienced anything like this and to think we may have vaccines to large parts of the world by the end of this year is incredible (again not something that Rickards can point to in his book given that he's already mailed the book off).
Ok, so you get the picture. I felt like this was a clickbait book written to make a few bucks. This book could have been better if he had waited a year or two (but by then I'm sure there will be 100 more books) and avoided the discussion about the source of the virus altogether. Why spend half of the book speculating on the origins of the virus in a book about investing?
I'd suggest you avoid this one altogether (unless you happen to believe as Rickards does and are hoarding large amounts of gold bars) and look for books like Scott Galloway's Post Corona or Michael Lewis's The Premonition. Galloway's book is going to provide you with much better advice on where to look for opportunities in the new world with a better handle on what is actually happening while Michael Lewis's book is going to do a better job of describing the actual virus.
When authors write books like this and their prediction turns out to be grossly wrong do they ever go back and refund people's money or write the book about how wrong they were? Food for thought. I need a beer.
I'm looking forward to hearing from anyone else who has read this one. That's actually an honest statement because clearly, this book rubbed me the wrong way, and my own bias' shows through. I'm ok with that.
I feel like a book like this is a good example of creating unnecessary polarization; my post on Chris Bail's Breaking the Social Media Prism would be a good alternative. Or perhaps actual books on investing which I've outlined here.