A review of Crash Proof by Peter Schiff with John Downes.

I can remember Peter Schiff being laughed at on CNBC for his alarmist warnings of American consumerism and the impending housing bubble. This book (Crash Proof) sat on bookshelves with specific warnings of debt securitization and the looming housing crisis before it happened. The principles Schiff teaches in this book are now difficult to ignore.

Schiff’s book details the effects of inflation, U.S. conspicuous consumption, and consequential results in plain speak. He also uses frequent analogies to help the reader along in understanding his viewpoints on inflation and why we as Americans should be paying attention to it.

When Schiff speaks about “inflation,” he’s not talking about the inflation figures that Wall Street and the U.S. government publish. Instead, he’s referring to the continuing devaluation of the U.S. dollar through rampant printing of money by the government to satisfy our unrestrained consumption of goods and increasing debt levels.

Why do we have a national debt and why does it matter? Simply, it’s because Americans like to buy things and say “I’ll pay ya back later.” Countries such as China and Japan are now holding this exploding bag of I.O.U.’s. What happens when China and Japan want to be paid back by people who have no personal savings, large debts, overvalued real estate, high unemployment, and a terribly devalued currency (yeah, that’s us)? The answer can’t be good.

If you’re the SUV guy currently paying a mortgage larger than the value of your home while watching a planet sized plasma TV all bought on credit, this book may not appeal to you or stereotypical notions of what makes the “American Dream.”

If you’re like me, I just wanna protect myself from the SUV guy above who doesn't care and this book is a great starting point even if you don't agree with all of Schiff's ideas. I'll look to contribute more foreign investment opportunities to the group although they may be more complex to evaluate.

Shhh!! Here’s a secret. We can still have the “American Dream” but we actually have to produce and pay for it. --Schlitz