I had the privilege of seeing John T. Reed speak in Mill Valley this week at the Bay Area Wealth Builders Association. He is a widely read Harvard MBA and West Point graduate who has written numerous books about investing in real estate. His presentation was primarily to promote a new book of his entitled “How to protect your life savings from Hyperinflaton and Depression“. It was interesting to hear him describe how you can actually have both of these seemingly opposite economic states almost at the same time, or quickly moving between the two financial axioms.
Jack outlined 21 things you can do to protect yourself in both inflation and depression. I won’t list them all but some of the most relevant were buying hard assets such as real estate. He actually prefers smaller buildings such as 1-4 unit because they are easier to sell and not subject to governmental regulation which I thought was a valid point. However it did not negate my bias towards mid size apartment buildings. Jack also suggest moving money out of stocks bonds and mutual funds and into liquid funds such as FDIC insured money markets. A couple other interesting ideas he recommends are bartering more, selling off unnecessary physical belongings and purchasing a million dollars worth of head and shoulders.
Although he admitted that some of his ideas might sound kooky at first, he pointedly affirmed that they were a response to a very kooky financial situation which is clearly unsustainable (printing of money). Jack discussed our national debt and our debt to GDP ratio’s which were so far out of whack that only 5 things could possibly be done to prevent hyperinflation or depression. One was to inflate the dollar, another was to default on our national debt, another was to cut government spending by 40%. Jack described how some of these are not even legal, in fact he indicated that only one was legal, moreover only one was a viable option for our government, that is to pay off our debt with inflated dollars.
I ordered a few of Jack’s books coming away from his talk with an enlightened, if dissociative
perspective. He is a calculating business mastermind with an all encompassing, yet completely substantiated view of our economic crisis. Its unfolding in front of us, created by our government spending and can be hedged by purchasing assets such as real estate.