Two Incredible Books

by Frost on December 6, 2011

I’ve been reading constantly since I moved to Chiang Mai, but two books in particular stand head and shoulders above the rest. As always, I’ll remind you that I earn a small commission from Amazon for any books you purchase after clicking through the below links.

Crash Proof 2.0: How To Profit From The Economic Collapse, By Peter Schiff

Peter Schiff is the Austrian economist who has been correctly forecasting the oscillations of the world economy for the past decade. The sub-title of Crash Proof implies it’s a book on investment strategy, but it’s also a narrative of the story of the events leading up to America’s imminent descent into third-world banana republic status.

Many of Schiff’s recommendations are similar to those that I’ve advocated on this blog and in the Freedom Twenty-Five Book, but even I was persuaded to change my mind on a few points of investment strategy as a result of this book, and I have put a great many hours into considering the optimal pre-crash portfolio for the modern western investor.

The real value of Crash Proof though isn’t the investment advice. In a sentence: Buy gold that’s free of counterparty risk, East Asian equities (particularly those of companies catering to East Asian consumers), and avoid US dollars and dollar-denominated assets like the plague. Schiff goes into more detail than this, but not a lot more. Instead, this book lays out the assumptions and logic behind why this portfolio is optimal.

This is important because, well, why should you trust me? I’m just an asshole with a blog. And why should you trust Schiff? He’s just an asshole with a book, and an asset management company that he (tongue-in-cheekily) pimps throughout it. Together, we are suggesting you build a portfolio that will make you the laughingstock of ‘respected’ economists and financial managers. Schiff cannot ground his advice on an appeal to authority, since he has none. He is a devotee of an eccentric and obscure school of economics that is all but dead in the 21st century academic world. The respectable financial press pays him only the bare minimum of attention owed to a man who has been so consistently accurate in his unpopular predictions. According to anyone who matters, Peter Schiff is a nobody. Thus he is forced to lay out his arguments, and invite you to make your own decision. Fortunately for you, the fact that the masses are so loathe to appear unfashionable and too shallow to work through his reasoning, means there’s going to be a lot of money lying around for the savvy investor in the coming decades.

My one criticism of the book is that I was toying with the idea of writing a very similar one somewhere down the line, so in that respect Schiff is an asshole for scooping me. Aside from that, Crash Proof 2.0 is a clear, entertaining and rigorous introduction to countercyclical investing, and I recommend it to absolutely everyone. Buy it here.

The Warrior Diet, By Ori Hefmekler

The Warrior Diet is a pretty good diet book. Much of the advice it prescribes will be familiar to readers of Freedom Twenty-Five: Natural, organic foods, intermittent fasting, and eating 1-2 large meals a day instead of 5. I actually take issue with a few aspects of the Warrior Diet, specifically the author’s failure to condemn grains – although the edition I read was quite old, so perhaps Hefmekler has changed his tune on this in subsequent years.

The real value of The Warrior Diet is that it will encourage you to completely re-evaluate your relationship with food, and maybe even life in general.

What pulled me into The Warrior Diet was the author’s familiarity with the nutritional histories of the Ancient Greek and Roman Empires, and his frequent linking between Greek and Roman nutritional practices with healthy habits that we can mimic in the 21st century. (Aside: If you have any recommendations for books/blogs/essays on the history of the Ancient world, please let me know in the comments.) ¬†For example:

“The historical correlation between hunger and freedom is quite evident. During the period when the Bible was written, and later, during the Roman Empire, hunger and fasting were considered an integral part of life for free people, warriors and those who wandered.”

“Slaves, on the other hand, were fed frequently throughout the day. The Israelite slaves’ first complaint after escaping from slavery in Egypt, was of hunger, and they wandered in the desert for forty years, adapting, and eventually becoming a free nation. Only the second generation of these slaves reached the Promised Land.”

“Physical Appearance was crucial to all Romans. They conducted business face-to-face. Army commanders had to stand before their soldiers and demonstrate physical and rhetorical authority. A positive self-image was an essential factor that could never be taken for granted.”

“Roman awareness of self was derived from the way others looked at them. Their virtues and vices were an open book, and were manifest in their style of dress, tone of voice, and choice of body movements. They were forever on stage, but always played themselves. Judged by their physical appearance, those who neglected it were no longer respected as citizens or men. To look at a man was to know the truth about him.”

“The Ancient Greeks had a common saying: “Tell me what you eat, with whom and how, and I will tell you who you are.”

I find these bits of Ancient history interesting, and not just academically. Young men of the 21st Century have the misfortune of coming of age in a world that offers us no role models, in a culture that seems to actively hate us. As a young man, I can either aspire to grow up to be like Ray Romano, or I can reach back into the distant origins of Western Civilization, and find role models there. Learning about the Ancient Greek and Roman civilizations – warriors, philosophers and citizens who far outclass those of the present day – gives me strength. It motivates me to take pride in myself, to rise up above the mediocrity that surrounds me, and to aspire to a greater ideal of manliness and humanity than the contemporary world can offer me.

The Warrior Diet is also a damn good source of information, in particualr regarding the myriad health benefits of Intermittent Fasting. Buy it here.

{ 7 comments… read them below or add one }

sth_txs December 14, 2011 at 10:33 pm

The reason Austrian school of economics is disparaged is that it does not believe any state intervention can ever make any bad economic situation better. It also puts the individual and property rights first, so it receive no fair hearing in academic circles.

The truth is most academic economists are merely bought whores to promote the idea of fiat money and central banking.

Rollory December 7, 2011 at 11:39 pm

What davver said.

Karl Denninger’s “Leverage” might cause you to view some of Schiff’s advice a bit differently:

http://www.amazon.com/Leverage-Cheap-Money-Destroy-World/dp/1118122844/

NomadicNeill December 7, 2011 at 5:55 pm

Oh, and if you like Schiff read Jim Rogers’ Hot Commodities.

NomadicNeill December 7, 2011 at 5:55 pm

Why trust Peter Schiff? Because he’s been consistently right for the past 10 years.

davver December 7, 2011 at 8:40 pm

Actually, he hasn’t. His firms main investment strategy has been European blue chip stocks, which have hardly done well. And he was still pimping oil at $140 a barrel.

I’ve met Schiff in person and talked to him. He’s basically a less aware version of Ron Paul or Rothbard. You’ld be much better off just reading Hayek yourself and better summaries of his work. Schiff adds no new insight, if anything his understanding of Austrian economics is incomplete.

His investment strategy basically boils down to, “America sucks and the dollar sucks.” Alright, but Euro sucks too, and China has its own massive bubbles. Schiffs analysis starts and ends with not liking his own country.

He made some good money betting against mortgages, and his firm is actually one of the only ways for retail investors to buy specific companies directely on overseas exchanges rather then through funds or intermediaries. But I’d advise doing your own research and relying on them for execution rather then turning over th research to them.

Overall, I like the guy. But I saved myself a lot of money by not taking his advice in 2008 and betting on deflation.

Jack Dublin December 7, 2011 at 3:00 pm

I’d recommend Edward Gibbon’s ‘Decline and Fall of the Roman Empire.’ Elusive Wapiti posted a long review. If you’re interested in Austrian economics or just political theory in general, check out mises.org. They have thousands of dollars worth of books, free to download, in epub or pdf format.

cypriankorzeniowski December 6, 2011 at 10:45 pm

You would enjoy Plutarch’s Lives of the Noble Greeks and Romans. Herodotus is similarly inspiring (get the Landmark edition; the maps are invaluable). Thucydides (get the Landmark edition for him, too, otherwise you’ll be awash in a sea of meaningless geographical reference points) and Tacitus are great as well, but they’re a bit harder to get into. The last two deal with periods of decline in the ancient world and aren’t as inspiring, but their writings contain timeless lessons on politics.

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