The Great Bu$T Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away. This is your Concise Reference Why and How Best to Survive It [Englisch] [Taschenbuch]

This book, written specifically for citizens of the US and the UK, is one of the most sobering I have ever read. To the layman at least, it appears to be argued logically enough, the basic idea being that in the western economies the spending of individuals constitute the lion's share of GDP. In the next few years some 100m baby boomers in the US will start to leave the highest spending age group (45-54). As people nearing retirement tend to reduce their spending and start to withdraw their savings from more risky investments such as the stock market, this will cause a depression even deeper than the 1930s and stock markets to dive. The book forecasts that some 30m may become unemployed in the US alone. (A similar picture emerges in Japan though the age band is lower.) Almost every major stock market move in the last century or so can be accounted for by such demographics. These apocalyptic events are forecast to happen any time from 2009-2013 and it is recommended people be out of the stock markets by 2010 at the latest. The depression may last to the mid 2020s.

I just wonder how globalisation may affect the situation, both in terms of increased exposure of western companies to Asian markets and the vast numbers of increasingly wealthy Asian middle class who might invest some of their spare cash (and there may be an awful lot of it) in foreign markets. It must have been somewhat difficult for western individuals to invest directly in Asian markets, and vice versa, even in 1987 but in 1929 it must have been all but impossible.

I cannot agree either with some of the steps recommended to protect oneself either. If currencies weaken then treasury bonds may not quite be the saviour they are portrayed. The traditional safe havens in times of turmoil - precious metals such as gold and silver - are not even mentioned. This may be because they are traditionally associated with inflation. However, they also come into their own in times of currency crises and "funny money" i.e. when the money supply threatens hyper-inflation. Investing in foreign stock markets such as India and China, nations which should continue to grow strongly for the foreseeable future surely should also be considered. With such strong growth in Asia, I find it difficult to believe another of the book's predictions which is that the oil price may possibly fall as low as $5 a barrel!

I consider this book - and others like it - to be a warning as to what might happen rather than what will. Nevertheless, if it prompts individuals to review their investments and to diversify accordingly it will be no bad thing. I just fear so many people may be so indebted for years to come that they won't be able to.

Mr. Arnold's title attracted my attention because I, like many financial observers, do see a depression on the horizon. His use of the 45-54 year old baby boomer demographic is interesting and echos certain ideas of Elliott Wave Theory and Socionomics.

The author's conclusions, formed using a relationship between U.S. population growth and the Dow Jones Industrial Average, support a coming financial crisis of tsunami proportions, but his optimism that things will not erupt until the beginning of the next decade and his investment recommendations for the immediate future are arguable.

A purchaser of this hour-long read would be advised to immerse himself in Robert Prechter's, Conquer the Crash and Fiancial Reckoning Day by Bonner and Wiggin. These books better illustrate the world as it is, bringing together the influence of world money supplies, gold, interest rates, world politics and, very importantly, social mood.

Where Daniel Arnold sees the correlation of the population and the Dow Jones, Prechter documents the predictive value of the Dow in measuring social mood. I would allow that Mr. Arnold has accurately pegged the 45-54 year olds as the alpha group that leads the population's mood, or herd mentality, as a result of its purchasing and investing power.

Read this book. Look at the charts. Just don't make any immediate investment decisions without considering that our world is on the verge of a massive "asset devaluation" that will transcend stocks, bonds, real estate, and for a time, precious metals. The looming possibility of a world-wide liquidity crisis triggering liquidation of assets to cover the costs of mounting debt, should be of greater concern.

Arnold issues several warnings, should his predictions come true, and offers a number of actions individuals may take. Most notably, he supports why personal property most likely will be at risk to theft or destruction in an environment of rising unemployment and rising crime, but on page 51 advocates, "even if you would not support gun-control during healthy times, consider supporting gun control legislation to help take the dangerous edge off the crime wave that will hit during the depression." Libertarians and 2nd Amendment supporters will have a real hard time with that one.

Like most reviewers, I found this brief book to be a highly believable warning of the coming huge depression. How can you argue with a thesis that accounts for the US economy's ups and downs in detail for nearly a century!! Unlike the few, (like Special K below), who completely miss the key message, IT IS DEMOGRAPHICS that controls everything. Any economist will tell you that 70% of GDP is simply us (we are the demographics) spending our paychecks and, as Arnold points out, it's more like 90% when we add the government's spending of our taxes which they take from our paychecks. Arnold's thesis is a better developed version of noted economist Dent's theory that specific demographics always control where the economy is going. It's not really theory anymore - it's plain commonsense, which is what comes out in Arnold's book. Dent also predicts a massive "Mother of all Depressions" starting around 2010. Special K and his ilk, who are quite happy I'm sure to (correctly) attribute the coming Social Security crisis solely to demographics but want to insist that the economy in general cannot possibly be, are the ones that are going to lose everything in what's coming. Go read Arnold to understand (concisely WITHOUT 200 extra pages of added irrelevant "fluff") that demographics is really all that counts - and why. My God, he even shows how the Japanese near depression from 1990 to 2003 was caused by exactly the same demographic data within Japan. What more do you want? Read it.