Investing During Inflation & Recessions

As you read The New Great Depression: Winners and Losers in a Post Pandemic World, there will be several learning points to take with you. First, you will see how the pandemic has changed the entire world from a financial standpoint. Then, you will see how we can learn from past occurrences which had similar impacts. Finally, you will be presented with advice concerning investing during times of inflation and deflation.

For other books on this, read our list of the best books on investing during times of inflation.

The New Great Depression Book Summary

This book starts with talking about how the pandemic started and compares it to other pandemics. The author then shares predictions of what will happen to the economy. Then discusses how to invest to protect wealth and succeed during the inflation era that is coming.

When it comes to predicting a crisis, nothing makes it even more interesting than having the same man who made the prediction also be the same explaining the process of surviving it and moving forward. This certainly does fit the bill for author James Rickards as a bestseller book.

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As we can see, the crisis we are currently experiencing is nowhere near what it was like in the past. In fact, it is believed to be far worse than any other world crisis. The amount of laid off employees will rise. There will be an increase in bankruptcy cases, and the amount of bad debt that banks receive will cause them to shutter in pain. There will be a huge amount of debt and deflation and a very weak chance of seeing any recovery for the future. It is also important to note that there will be social chaos and disorder shortly after the markets start to collapse. When it comes to experiencing the worst, officials believe it is over, although that is not true. When it comes to being knowledgeable, an investor knows that there is light at the end of the tunnel. Other great books to read about making it through tough times are I Love Capitalism from the founder of Home Depot or Delivering Happiness about the founding of Zappos.

Within the pages of The New Great Depression, the bestselling author explains in detail what risks are involved in the financial world and what can be done by investors to survive it all or even flourish while others sit back and watch.

By having access to the best information currently available, James Rickards is able to get a clear view of what the entire picture looks like. This also helps us know what is really going on in the world and how we are able to do something about it. The New Great Depression: Winners and Losers in a Post-Pandemic World truly is a book to be read regardless of being a fan as well as for an investor looking to have a clear understanding of wealth preservation and to do it during the pandemic. To service clients better for your business at this time, read the book They Ask You Answer.

According to the book, there were many policies that ultimately became bad choices and which helped lead to the collapse of the economy. This collapse is easily compared to the times of the 1929 Depression and stock market collapse, which lasted until 1933. Even Conrad Hilton was hurt by the depression and went broke. More on how he thrived post recession in his biography Be My Guest.

As we can see today and the conditions surrounding it, it is believed that the GDP of the United States had dropped by more than 3.5% during 2020. It is now believed to grow and recover rather quickly.

With nothing to compare the Hoover collapse of the stock market, it is a good thing to say that financial recovery is possible. This recovery will be possible through campaigning efforts that are rigorous so that change can occur.

Knowing this, is there really a depression going on? Although it may be up to speculation, the word depression is not an accepted description of a time where unemployment numbers can be the go-to source for economic guidance since the start of the pandemic. Having a rate of unemployment that reflects the numbers is a better method. As we can see, in 2020, the jobless rate was up by more that 22%. Bill Gross of PIMCO invested through good times and bad over his 40 year career and his book The Bond King is filled with lessons and stories.

Prior to becoming a writer, James Rickards has managed to work his way up the corporate ladder for several institutions in the financial market. He quotes heavily about John Maynard Keynes`s depression definition as being a condition that is chronic in nature pertaining to actions and activity that is not at a normal standard lasting for an unknown length of time and without seeing any possible recovery. It is also described that depression is more close to being psychological in nature and not just a numbers figure. Having a strong dislike for risk brought on by the pandemic could easily cause consumers to hold back on their money until the future becomes more certain. As an entrepreneur cash flow management is a number one concern. For better financial management consider the book Profit First or The Great Game of Business.

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Having any type of threat like a pandemic will easily cause a decline in the system. This is what the book describes the unemployment rate and the fact that many may be hit hard by it continuously. It is believed that the growth of recovery will be a slow one lasting more than 10 years.

There may even be some thought that having a forecast stretching 30 years is far fetched and unrealistic. However, there is also evidence saying that it may actually be true, which can be backed by how the government is poorly judging the entire pandemic. Even since 2008, the growth we currently experience is solely based around depending on debt.

With a reaction from the fiscal markets, as a result of the pandemic, guarantees that the ratio of GDP and debt continue to increase. The pressure felt from deflation will seem great for both medium and short terms. Many businesses will not see investing as an option when they are already tight on cash. This is what occurred in 1990 as Japan experienced a big stock market and property crash. With the government involved, a higher risk of experiencing a return too soon when debt ratios are being decreased. Not only that, but the crisis financially has had a poor impact on the growth of productivity. Billionaire Kirk Kerkorian shares his own philosophies about debt and managing business in biography The Gambler.

A worsening performance may take place due to a decrease in human and physical capability which is a direct result of the coronavirus. In order to remedy this, it is necessary to implement investment in the infrastructure. However, the central bank was supposed to have enough time set aside so that reform and investment could take place following the crisis. Regardless, there was not much done.

It can be difficult to trust a policymaker when they want to create growth with debt. James Rickards feels the same way about the required quarantine that authorities enforced, which he felt was uncalled for. In fact, he is a firm believer that the handling of the pandemic is going to be seen as a great mistake for years to come. Despite that, it is accepted that the government has done a good job in keeping healthcare protected as well as using valuable time to have a developed vaccine in the works.

With the Federal Reserve, the performance was seen as subpar throughout the crisis and blames Wall Street for inflating what savers had. It was also thought that the dollar would become devalued by gold as was the case during the original depression. This would have been an interesting turn of events if it had come to be.

Investing During Inflation

As The New Great Depression comes to a close, the reader is given some sound advice on investing during inflation. The key point being centered around building a sound portfolio that will withstand inflation. Besides this, other insights exist within the book which makes it an even greater read.

Some ways to ensure your investment portfolio is sound is by investing in precious metals such as gold and silver. These precious metals have always been known to remain resilient when inflation hits. However, there is a disadvantage of having precious metals and that involves their inability to produce additional income.

Investing in commercial real estate is another option that lessens the effect of inflation because it is designed to generate income in the form of lease agreements.

Investing in stock can also provide protection against inflation by allowing the investor to own a certain amount of a company. The best type of stock to consider is a cyclical stock which is able to change along with the economy.

About The Author James Rickards

Throughout his career James Rickards has seen his share of finance, and business. He is the current editor of a newsletter known as Strategic Intelligence as well as director of his James Rickards Project. He has written several other bestseller books and has made his presence known throughout the government.

Mr. Rickards currently holds a director position with the New York City based merchant bank Tangent Capital Partners LLC. Along with that, he also holds a senior management position with Omnis, Inc. within its market intelligence division. This consulting firm is headquartered in Virginia.

Additionally, James Rickards enjoys managing risk, investing, and counseling others within the capital and financial markets. His experience spans for more than thirty years and today he continues to provide guidance to major government branches such as the Intelligence community and Department of Defense concerning financial situations happening globally. He also took part as a Pentagon sponsored financial war game facilitator.

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