We all feel like something is off. They tell us the economy is doing great, but everyone knows better. Credit card debt is at an all-time high, inflation has run-a-muck, wars are going on all over the world. People are expecting some kind of shoe to drop but aren’t sure what.
During recessions & depressions there are those that lose everything, those that just get by, and others that thrive. You want to be the latter, not the former. To do that, you MUST learn from those that have gone through it before. I’m recommending 5 books that I’ve read, about bad economic times, and that you should read too.
Remember, Mark Twain once said, “History doesn’t repeat itself, but it often rhymes.” In other words, learn from the past, so you are not destined to repeat the past’s failures.
1. Extraordinary Popular Delusions and the Madness of Crowds
Charles Mackay’s book was written in 1841 and it covers different financial bubbles, and the madness & delusions people would have about various subjects over the years. The economic bubbles he covered were:
- The Dutch Tulip Mania of 1630s
- South Sea Bubble of 1711
- Mississippi Bubble of 1719
He goes on to write about various delusions that covered Witch Mania, the Crusades, Alchemy and Slow Poisoners. I found the book very useful. It made me realize that people get wrapped up, in the same types of follies, regardless of the time period we are in.
2. Great Depression A Diary
This book presents the personal account of Ohioan attorney Benjamin Roth during the Great Depression. Roth vividly captures the era’s poverty, unemployment, bank runs, populism, political grievances, and the widespread despair of the middle class. If you’re seeking insight into life during a time when the American economy faltered—and could potentially do so again—this book is a MUST read.
3. When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation
This book describes Germany hyperinflation drove the price of eggs from $7 to $5,000—a staggering 700-fold increase in just a few months. This was the result of failed monetary policy. Rudy Havenstein, Germany’s equivalent of Jerome Powell in the 1920s, made a series of poor decisions, the most catastrophic being the excessive printing of money to ostensibly manage Germany’s immense debt to France. Havenstein’s actions decimated the middle class and paved the way for the rise of Adolf Hitler. With the immense inflation the US is going through, people can’t help but fear a period of hyperinflation on the horizon.
4. Currency Wars
James Rickards wrote this book in 2010, and it provides a historical overview of the currency wars countries go through when trying to combat each other, outside of hot wars. He covers the devaluation of the British pound in the ’20s & ’30s and go into the mechanisms of Currency Wars. If you find him in interviews or podcasts currently, he touts that the US is in a currency war, where other countries are trying to get the world to abandon the US dollar as a reserve currency. Wonderful book that covers how countries may try to usurp the US, by devaluing its currency in future years.
5. The Storm Before the Calm: America’s Discord, the Crisis of the 2020s
According to author George Friedman, the US economy is governed by two secular trends: the institutional cycle, characterized by stability, repeats every 80 years; and the socioeconomic cycle, characterized by periods of economic growth, repeats every 50 years. Now for the first time since the founding of the Republic, the termini of both cycles are going to converge. What happens then?
Dr. Friedman says: economic disaster. He asks, “why is there a minimum age to vote, but not a maximum age?” Social Security is a pyramid scheme and needs to be means-tested or privatized; student loan debt is a ticking time-bomb. Neither looks to be defused, hence economic disaster, hence apocalypse soon, maybe now.