WORRIED ABOUT THE HOUSING BUBBLE? You should be, but don't let it monopolize your agita
. There are four other bubbles also deserving of attention, according to America's Bubble Economy
: a stock-market bubble, a foreigner-supported-dollar bubble, a consumer-debt bubble and a U.S.-debt bubble. When the five collide in a "bubblequake," the book's authors predict, the air will rush out of the pumped-up U.S. economy, deflating the average American's assets and standard of living.
But not to panic. America's Bubble Economy
has a subtitle: Profit When It Pops
. Eric Janszen, one of its four authors, suggests keeping 10%-15% of your assets in gold, which he sees rising "to a peak price of $2,500 to $3,000'' an ounce. Janszen et al
. also recommend eurobonds and euro-denominated exchange-traded funds, because most of Europe isn't as indebted as the U.S. and its main currency should outperform the dollar.
A former venture capitalist and founder of the financial Website iTulip, Janszen says the U.S. is repeating errors of the Nixon era, including massive government deficits, under-funded entitlements and an unpopular war the government can't fund with higher taxes or special bonds. Throw in today's growing global demand for commodities, and "... all roads still lead to inflation, whether due to energy costs, unfunded deficits or dollar-currency risks," he says.
Janszen, who was rightly skeptical of the Internet craze early-on, tells Barron's
that the current stock-market bubble is "a reflection of monetary inflation" rather than future earnings. A more normal trendline, he says, would put the Dow at about half its present level, or 6,000. Now, that's something to worry about. —Susan Witty
, November 13, 2006)
Chosen by Kiplinger’s as one of the 30 Best Business Books of 2007
Paul Farrell, Senior Columnist at Dow Jones MarketWatch said on February 12, 2008, "In short, America's Bubble Economy's prediction, though ignored, was accurate."
"More roadmap than crystal ball, this book doesn’t simply advise a reader what’s coming, it tells a reader exactly how to plan and respond. That it manages to predict an awfully troubling near future while still managing to be readable and even funny in spots, is no mean feat."
—Ken Kurson, co-author with Rudy Giuliani of the No. 1 Bestseller Leadership
and financial columnist at Esquire
"A sobering financial wakeup call for all Americans."
—C. Thomas McMillen, Rhodes Scholar and former three term U.S. congressman
"Whether you think it goes too far or hits a bull’s eye, America’s Bubble Economy presents a riveting argument for what may be coming and how to make the most of it."
—Philip J. Gross, former CFO, America Online
"Sound advice in these times, America’s Bubble Economy delivers what we need to hear. Its prognosis may be harsh, but these insights are astute, logical and compelling."
—Dr. Rodney Stevenson, Professor of Business, University of Wisconsin-Madison, past president of the Association for Evolutionary Economics
"Finally, a way to profit from the government’s reckless spending habits!"
—Jim Goldinger, Managing Director, TD Capital Ventures