Book Review: Demise of the Dollar and Why It's Not Worth Your Time to Read

The Demise of the Dollar... and Why It's Great For Your Investments

This was another book I had recently got.  I started it waiting for dinner, and it was pretty light reading, so I ended up zipping through the 200 pages or so last night.

About half-way in, I started getting pretty peeved.  The whole book is really just an argument for why the dollar is screwed, which while somewhat cogent and interesting, has nothing to do with the "investing" part. Of the 198 pages, there's one or two pages telling you to invest in gold, and then more detail starting on the bottom of pg 188.

If you're interested in this book for their "thoughts" on investing, you can just skip to the last 10 pages.  But, since this wasted a couple hours of my time, I'll list them out and you can skip the book entirely (the argument and analysis on the US economy is decent but by no means comprehensive - I've read much better and I also spotted some of the very same errors in their charts that they've pointed out in others, so I'm not sure I'd recommend this on that basis either):

• Direct Short-Term Speculation: Dollar Index Put Options - buy a four-month put (shorting options) on USDX (bet on the U.S. Dollar Index going down)
• Direct Short-Term Speculation: Euro Call Options - buy four-month call options on Euro FX (bet on the Euro going up)
• Direct Long-Term Speculation: Foreign Currency Certificates of Deposit - use something like Everbank to get a Commodity Index CD (comprised of the AUS$, NZ$, CND$, and SA rand)
  
• All-Season Dollar Hedge: Gold - minted coins, ETFS (GLD, IAU), mutual funds, options and futures

It's probably worth diversifying (I've been moving to rebalance to at least 30% in international funds, and 5-10% in metals is probably not a bad ide), but overall I'd have to say that these recommendations are pretty lightweight and braindead, and vaguely useless (the number of people likely to participate in currency speculation I suspect is pretty damn low, and the FC CDs have pathetic returns even if you offset for dollar depreciation).  I would have expected analysis or forecasting of which industries would likely to be most/least impacted, what fundamentals to look at for specific companies, etc etc, but there was pretty much nothing of that sort.

Comments

[allaboutgeorge]

Would you tag this book "investing," or was it so foul that you don't want to steer folks wrong?

[Leonard]

Hmm, I suppose this book is supposed to be an investing book, but I yeah, I think it falls far short of that. It's more "armchair macroeconomics" than anything else.

Sure I think it's important to recognize that our long-term deficits (gov't, trade, personal) are unsustainable and that a correction will involve a continued fall of the dollar (either as planned by the Fed or in a more "disorderly" manner by speculation), but that's not really investing advice.