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The Big Drop: How to Grow Your Wealth During the Coming Collapse
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Hardcover
Published January 1, 2016
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Displaying 1 - 17 of 17 reviews
September 21, 2015
A lot in this book, written mainly to subscribers of the author's financial newsletter business, felt like a rehash of "The Death of Money", but never mind. There are new insights, the writing is solidly good, frequently superb, the reasoning is structured, consistent and intelligent, and much of the stuff herein is simply fascinating.
"The Big Drop" is Jim Rickards' own take on "The Real Crash", obviously. I did enjoy this book more than Peter Schiff's tome: The passion is subdued and the reasoning articulated in a fashion more to my personal sensibility. Both are important works for which I find myself grateful.
What the book is about and why it is important: "Money is transitory and wealth is permanent. A lot of people confuse money and think “Well, I have a lot of money so I’m wealthy.” In the short run, that may be true but in the longer run, the money can go away. Wealth, on the other hand, is something that prevails. The value of money may collapse, but there are things you can do and strategies you can pursue to create and preserve wealth that will survive a monetary collapse."
Since the book is of limited distribution, I'll advance a number quotes to help elucidate contents and tone.
"A balanced portfolio of cash, gold, land, fine art, government bonds, alternative investments and stocks in the energy, transportation, agriculture and natural resource sectors should do the job."
"Experiments by behaviorists show that people think a 2% cut in wages with no change in the price level is “unfair.” Meanwhile, they think a 2% raise with 4% inflation is “fair.” In fact, the two outcomes are economically identical interms of purchasing power. The fact, however, that people prefer a raise over a pay cut while ignoring inflation is the essence of money illusion."
"Here’s how it works. Suppose I’m an oil exploration company. Let’s say I borrowed a couple hundred million dollars to drill for oil using fracking technology. The bank -- the lender, bond investor or whoever — says: “Well, Jim, you just borrowed $200 million. How are you going to pay me back?” And I’d say: “Well, I’m going to sell my oil at $80 a barrel.” To which the bank says: “How do I know that’s true?” So, I go to Morgan Stanley, JP Morgan or Citibank and I buy what’s called a “swap contract.” It’s a kind of derivative. Citibank or whoever basically agrees to pay me the difference between $80 and the actual price of oil. If oil goes to $50 and I have a swap contract with Citibank that guarantees me $80, they have to pay me the $30 difference. That way, I’ve locked in the $80 price. That’s not a free lunch. Oil producers give away the upside. If crude prices go to $150 they might have to pay the lenders the difference. But oil companies try to protect their downside. Oil companies are protected because when oil goes to $50 because they can call up the bank and say: “Hey, bank, send me the other $30 a barrel because we have a deal.” And the bank will have to send it to them. Through the derivative contract the loss now moves over to the bank. It’s not the oil company that suffers the loss. This is the case with the global financial system today — you never know where the risks end up."
"Don’t ever think for a minute that the central bankers know what they’re doing. They don’t."
"Nobody in economics, nobody on Wall Street, nobody on the buy side, nobody in academia, nobody I’ve seen anywhere has a worse forecasting record than the Fed. I don’t say that out of spite or to try to embarrass anyone; it’s just a fact. Year after year after year they produce these very high growth forecasts, and every year they’re wrong. They’re not just wrong by a little bit; they’re wrong by orders of magnitude."
My favorite quote: "Central planning failed for Stalin and Mao Zedong and it will fail for Janet Yellen too."
Another brilliant flourish of phrase: "Hayek said that nobody is smart enough or has enough information to plan an economy, no matter how much power they have. At the time, he was thinking the Soviet Union."
"Depressions are only cured by structural changes in areas such as fiscal policy, regulation, and labor markets that are not controlled by central banks, but rather by legislatures and the executive. Indeed, the U.S. is in a depression today, and its persistence is due to the fact that positive structural changes have not been implemented. Federal Reserve policy is futile in a depression."
"If you’re the outlier who wants to pursue the new science, you’re not going to get your PhD, or you’re not going to get it from a prestigious school. You won’t be taken under the wing of a prominent thesis advisor or get published either. And, perhaps most important, you’re not going to get a job. That’s when the bright 25-year old gives up and writes something that the professor likes instead."
"A Picasso painting, carefully rolled up and stashed in the lining of a suitcase, can be worth $500,000 per ounce. Better yet, a painting does not set off metal detectors in airports. Paintings are the best way to move wealth without detection."
To say nothing of the brilliantly executed speculative fiction dystopia that opens the book!
"As I awoke this morning, Sunday, Oct. 13, 2024, from restless dreams, I found the insect-sized sensor implanted in my arm was already awake. We call it a “bug.” U.S. citizens have been required to have them since 2022 to access government health care. The bug knew from its biometric monitoring of my brain wave frequencies and rapid eye movement that I would awake momentarily. It was already at work launching systems, including the coffee maker. I could smell the coffee brewing in the kitchen. The information screens on the inside of my panopticon goggles were already flashing before my eyes."
It continues: The whole 5 pages are well worth publication by TOR.COM!
"The Big Drop" is Jim Rickards' own take on "The Real Crash", obviously. I did enjoy this book more than Peter Schiff's tome: The passion is subdued and the reasoning articulated in a fashion more to my personal sensibility. Both are important works for which I find myself grateful.
What the book is about and why it is important: "Money is transitory and wealth is permanent. A lot of people confuse money and think “Well, I have a lot of money so I’m wealthy.” In the short run, that may be true but in the longer run, the money can go away. Wealth, on the other hand, is something that prevails. The value of money may collapse, but there are things you can do and strategies you can pursue to create and preserve wealth that will survive a monetary collapse."
Since the book is of limited distribution, I'll advance a number quotes to help elucidate contents and tone.
"A balanced portfolio of cash, gold, land, fine art, government bonds, alternative investments and stocks in the energy, transportation, agriculture and natural resource sectors should do the job."
"Experiments by behaviorists show that people think a 2% cut in wages with no change in the price level is “unfair.” Meanwhile, they think a 2% raise with 4% inflation is “fair.” In fact, the two outcomes are economically identical interms of purchasing power. The fact, however, that people prefer a raise over a pay cut while ignoring inflation is the essence of money illusion."
"Here’s how it works. Suppose I’m an oil exploration company. Let’s say I borrowed a couple hundred million dollars to drill for oil using fracking technology. The bank -- the lender, bond investor or whoever — says: “Well, Jim, you just borrowed $200 million. How are you going to pay me back?” And I’d say: “Well, I’m going to sell my oil at $80 a barrel.” To which the bank says: “How do I know that’s true?” So, I go to Morgan Stanley, JP Morgan or Citibank and I buy what’s called a “swap contract.” It’s a kind of derivative. Citibank or whoever basically agrees to pay me the difference between $80 and the actual price of oil. If oil goes to $50 and I have a swap contract with Citibank that guarantees me $80, they have to pay me the $30 difference. That way, I’ve locked in the $80 price. That’s not a free lunch. Oil producers give away the upside. If crude prices go to $150 they might have to pay the lenders the difference. But oil companies try to protect their downside. Oil companies are protected because when oil goes to $50 because they can call up the bank and say: “Hey, bank, send me the other $30 a barrel because we have a deal.” And the bank will have to send it to them. Through the derivative contract the loss now moves over to the bank. It’s not the oil company that suffers the loss. This is the case with the global financial system today — you never know where the risks end up."
"Don’t ever think for a minute that the central bankers know what they’re doing. They don’t."
"Nobody in economics, nobody on Wall Street, nobody on the buy side, nobody in academia, nobody I’ve seen anywhere has a worse forecasting record than the Fed. I don’t say that out of spite or to try to embarrass anyone; it’s just a fact. Year after year after year they produce these very high growth forecasts, and every year they’re wrong. They’re not just wrong by a little bit; they’re wrong by orders of magnitude."
My favorite quote: "Central planning failed for Stalin and Mao Zedong and it will fail for Janet Yellen too."
Another brilliant flourish of phrase: "Hayek said that nobody is smart enough or has enough information to plan an economy, no matter how much power they have. At the time, he was thinking the Soviet Union."
"Depressions are only cured by structural changes in areas such as fiscal policy, regulation, and labor markets that are not controlled by central banks, but rather by legislatures and the executive. Indeed, the U.S. is in a depression today, and its persistence is due to the fact that positive structural changes have not been implemented. Federal Reserve policy is futile in a depression."
"If you’re the outlier who wants to pursue the new science, you’re not going to get your PhD, or you’re not going to get it from a prestigious school. You won’t be taken under the wing of a prominent thesis advisor or get published either. And, perhaps most important, you’re not going to get a job. That’s when the bright 25-year old gives up and writes something that the professor likes instead."
"A Picasso painting, carefully rolled up and stashed in the lining of a suitcase, can be worth $500,000 per ounce. Better yet, a painting does not set off metal detectors in airports. Paintings are the best way to move wealth without detection."
To say nothing of the brilliantly executed speculative fiction dystopia that opens the book!
"As I awoke this morning, Sunday, Oct. 13, 2024, from restless dreams, I found the insect-sized sensor implanted in my arm was already awake. We call it a “bug.” U.S. citizens have been required to have them since 2022 to access government health care. The bug knew from its biometric monitoring of my brain wave frequencies and rapid eye movement that I would awake momentarily. It was already at work launching systems, including the coffee maker. I could smell the coffee brewing in the kitchen. The information screens on the inside of my panopticon goggles were already flashing before my eyes."
It continues: The whole 5 pages are well worth publication by TOR.COM!
January 12, 2019
I am generally not a huge fan of the financial doom-and-gloom subgenre ; but this author has an interesting background (he was an officer of the infamous hedge fund LTCM during its now-famous collapse, he helped formulate war games for the US military, etc.) and his books provide sometimes fascinating insights and new knowledge.
This books seems to be written in 2015, and predicted a near-term recession which could be triggered by a few different factors (including a drop in the price of oil). As of early 2019, we all know that recession did not happen. However, some of his reasoning was convincing and I agree with the general theme of the book; which basically suggests that maintaining the US dollar's status as a reserve currency will be increasingly difficult in the future.
The book is worth reading for the author's highly interesting viewpoint and suggestions of strategies to maintain one's wealth in a potential financial crisis.
This books seems to be written in 2015, and predicted a near-term recession which could be triggered by a few different factors (including a drop in the price of oil). As of early 2019, we all know that recession did not happen. However, some of his reasoning was convincing and I agree with the general theme of the book; which basically suggests that maintaining the US dollar's status as a reserve currency will be increasingly difficult in the future.
The book is worth reading for the author's highly interesting viewpoint and suggestions of strategies to maintain one's wealth in a potential financial crisis.
April 21, 2021
I'm migrating all my reviews to my blog. I'm keeping the old version here (because it makes sense to do it) but you can read the latest one on my blog: https://pothix.com/bigdrop/
TL; DR - A lot of theories about the next economic crash, if you want to know some connections between gold, dollar, and other different investments to protect you in case it happens, it may be a good book for you.
I'm Brazilian and some part of the economic context is not the same here, but there are some parts make totally sense. In case you like the economy, or have some investments and want to understand some relationships, or just want to "be warned" about what may come in the future, this book would be good for you.
TL; DR - A lot of theories about the next economic crash, if you want to know some connections between gold, dollar, and other different investments to protect you in case it happens, it may be a good book for you.
I'm Brazilian and some part of the economic context is not the same here, but there are some parts make totally sense. In case you like the economy, or have some investments and want to understand some relationships, or just want to "be warned" about what may come in the future, this book would be good for you.
December 19, 2017
This is the best chicken little economy book I've found. James is one of the few author's who seems tempered in his approach (e.g. he doesn't think the Fed are idiots). On the other hand he doesn't provide much actionable advice (but provides a ton of nice background) and seems to tout only a handful of investments. The actionable advice provided is similar to other sources
August 18, 2021
I admit I sped through the second half of this book and only read the sections that seemed new and interesting to me. This was the fourth book I read in a row from Mr. Rickards and whiIe I think he's brilliant and a solid writer, there's a lot of material repeated in his books.
December 9, 2024
Waste of otherwise good quality paper!
Nothing but a set of reheated meals from leftover dinners of two days ago.. that plus a ton of self-promoting blurb!
Shame! I found Currency Wars to be relatively ok.. so, I thought why not read this one! Big disappointment!
Nothing but a set of reheated meals from leftover dinners of two days ago.. that plus a ton of self-promoting blurb!
Shame! I found Currency Wars to be relatively ok.. so, I thought why not read this one! Big disappointment!
August 2, 2020
Scary truths about our economy revealed and fallacies debunked. Although some of the material is now a bit dated, many of his predictions are coming the before our eyes.
September 15, 2020
There is short biography of him in this book.
February 3, 2021
Gave up halfway through. It's dated and there were a lot of comma splices and typos and things that just didn't make sense grammatically. I couldn't get over it.
May 28, 2021
"Money is transitory and wealth is permanent. A lot of people confuse money and think “Well, I have a lot of money so I’m wealthy.”
July 7, 2022
Excellent read to prepare you for the volatility of the market to prepare you for inflation or deflation. Have a plan ahead of time.
June 25, 2025
Very interesting insights, but kind of paranoic views of our future.
August 11, 2017
This is the summary of Rickard's two earlier books that offer a world view of market trends and investment alternatives to protect against volatility in the value of the U.S. dollar through marketable securities and how to profit from them.
Rickard's accuracy and methodology in forecasting has been recognized and serves as an advisor on international economics and financial threats to the Dept. of Defense and the US intelligence community. He served as facilitator of the first ever financial war games conducted by the Pentagon.
He is currently Editor of a monthly newsletter, Strategic Intelligence and travels extensively throughout the world to interview leading authorities in finance to form his opinions on investment trends and investment opportunities for subscribers to his newsletter.
Rickard's accuracy and methodology in forecasting has been recognized and serves as an advisor on international economics and financial threats to the Dept. of Defense and the US intelligence community. He served as facilitator of the first ever financial war games conducted by the Pentagon.
He is currently Editor of a monthly newsletter, Strategic Intelligence and travels extensively throughout the world to interview leading authorities in finance to form his opinions on investment trends and investment opportunities for subscribers to his newsletter.
Read
October 1, 2015A great book, it has very practical suggestions for protecting wealth in the coming economic storms, I really appreciate Mr Rickards wise observations, based on his years of experience. He can take what many may view as a really dry subject, and bring it to life through his experience, his words, and his passion.
July 8, 2016
Iluminou-me em relação à ações de políticas econômicas dos Estados e sobre estratégias de investimento sob escopo mundial. Lerei de novo para agarrar alguns detalhes, mas notem-se que o livro se trata de uma grande "cópia" de venda para assinatura da newsletter do autor, mesmo assim, explica muita coisa.
September 5, 2019
Skimmed through the book because it is unnecessarily wordy. There are some good thoughts such as that we should accumulate wealth in a non-cash way, but I just don’t find Rickards very credible. He even worked at LTCM as their general counsel... A lot of his views just seem to be pure conspiracy theories...
February 10, 2016
James Rickards is one smart dude! I read two of his earlier books, and they were spot on! He writes clearly and cogently, letting you know exactly what to do when the Big Drop occurs. Well worth reading.
Displaying 1 - 17 of 17 reviews