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Code Red: How to Protect Your Savings From the Coming Crisis
Written by the NYT-bestselling team of "Endgame, "John Mauldin and Jonathan Tepper's" Code Red" explains quantitative easing, zero interest rate policies, money printing, financial repression, rising inflation and currency wars in layman's terms and offer insights to savers on how to protect their wealth. Today is a time of financial repression, where central banks keep interest rates below inflation. Savers and investors face high risks and low rewards in a world of financial repression. There are clear winners and losers as prudent savers are called upon to bail out reckless borrowers. "Code Red" outlines how to take advantage of the coming economic upheaval.
1 pages, Audio CD
First published October 23, 2013
31 people are currently reading
220 people want to read
About the author
John Mauldin
26 books18 followersJohn Mauldin is a renowned financial expert, a best-selling author, and a pioneering online economic commentator. His weekly e-newsletter, Thoughts From The Frontline, was one of the first publications to provide investors with free, unbiased information. Today, it is one of the most widely distributed investment newsletters in the world, translated into many languages. He is also the President of Millennium Wave Investments.
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Displaying 1 - 30 of 31 reviews
November 7, 2013
Despite being a bit thin on practical solutions for savers and investors seeking strategies for weathering the fallout that will inevitably result from the unprecedented global monetary experiment in which we find ourselves, Code Red is still a worthwhile read. Mauldin and Tepper speak in plain English about how we got where we are and where they think we are headed.
April 5, 2014
While the book did say some pretty interesting things overall I was disappointed as I awaited much more. I was expecting a lot of insights and analysis, models and predictions, instead the book stayed safely away from pretty much saying much, always hedging it's few definite opinions. To those new to it's subjects it is probably a valuable book but to the others it talks about old stuff and to me it felt like it was bringing nothing new to the subject. Who hasn't heard of diversifications? Plus it often felt like it was giving contrary advice, one moment being newspaper safe in it's warnings as to how all bubbles are unpredictable and investors always fall for the new one, the next moment advising to 'buy low and sell high'. Too much obvious stuff in the book IMHO.
That being said it did have a couple of interesting ideas to mention, for example i found interesting how they explained that while technically it is indeed easy for central banks to withdraw the pumped money, politically this will probably be troublesome as the governments have already gotten used to their low borrowing costs.
That being said it did have a couple of interesting ideas to mention, for example i found interesting how they explained that while technically it is indeed easy for central banks to withdraw the pumped money, politically this will probably be troublesome as the governments have already gotten used to their low borrowing costs.
March 20, 2014
Great book about economy and markets of the last 5 years and the future. It is written in plain english easy to understand.
October 2, 2022
A well researched and written book, with clear and thorough explanations of important financial events and developments during the past century through now. The author offers helpful diagrams to illustrate the points at hand. Now, while its true that deflation is viewed by many economists as something to be avoided at all costs, I wonder about the authors' outright and unquestioning support of this view.
February 14, 2019
Turn to the final section Afterword, and you will basically know all the contents of this book in about 10 pages. The main message is very clear and have been repeatedly stressed throughout the whole book (so some passages might be redundant):
- QE is like a morphine that is supposed to be used short-term but the central banks can't get rid of it now.
- Japan's "suicidal" depreciation was a highlighted case to illustrate the impact of QE.
- No economists were good at making predictions (about the timing of crisis, etc.), yet we as "suckers are willing to pay the seers even though it turns out that seers do not exist".
Towards the end, some useful principles are introduced to "ride the unknown current". In an "upside down world" where few economic indicators are distorted by central banks, investors need to stick to the simple fundamental notions such as sticking to the "moat" and diversification.
There are many classic analogies that debunk the myths of important concepts. I especially like the party analogy - speculative money holds a party at your home, creating roller-coaster sort of boom and bust, and when it is all over, leaving a mess with all drunk people leaving for home. It is also an interesting observation to see how people imitate others subconsciously, exacerbating the trend. In the end, it all seems to boil down to behavioural psychology/economics.
It is a fair book to understand economic fundamentals and start forming a critical/skeptical lens to look at common phenomena.
- QE is like a morphine that is supposed to be used short-term but the central banks can't get rid of it now.
- Japan's "suicidal" depreciation was a highlighted case to illustrate the impact of QE.
- No economists were good at making predictions (about the timing of crisis, etc.), yet we as "suckers are willing to pay the seers even though it turns out that seers do not exist".
Towards the end, some useful principles are introduced to "ride the unknown current". In an "upside down world" where few economic indicators are distorted by central banks, investors need to stick to the simple fundamental notions such as sticking to the "moat" and diversification.
There are many classic analogies that debunk the myths of important concepts. I especially like the party analogy - speculative money holds a party at your home, creating roller-coaster sort of boom and bust, and when it is all over, leaving a mess with all drunk people leaving for home. It is also an interesting observation to see how people imitate others subconsciously, exacerbating the trend. In the end, it all seems to boil down to behavioural psychology/economics.
It is a fair book to understand economic fundamentals and start forming a critical/skeptical lens to look at common phenomena.
January 1, 2015
repetitive
November 10, 2020
The authors lay out a very thorough history of how the central banks and governments, both in the United States and a number of other countries, such as Japan, the UK, and the Eurozone, have steadily and perhaps recklessly overspent, overborrowed, and overinflated the currency of our respective nations. There's nothing really new to me in all of this, it's pretty standard fare from "gold bugs", most of whom are trying to sell precious metals. For someone who hasn't seen this information before, it serves as a thorough education in finance and history at a level which most people will not get from the public schools.
I even learned a new (to me) term - rentier capitalist - one who no longer works for a living, but makes their living by "clipping coupons", collecting dividends, spending interest on accumulated capital.
The point of all this rhetoric, of course, is to tell a cautionary tale, which can be summarized thusly:
"Since there can actually be no such thing as a government raising revenue at no cost, simple logic tells us that someone has to pay. It is impossible to know in advance who will pay for a central bank's 'free lunch,' only that someone, somewhere will eventually pay."
So enjoy all your free lunches, folks. At some point, the bill will come due, and whatever working stiffs are left in this country (and others) will end up paying the tab. If you think The Rich are going to pay, you haven't been paying attention. The Rich will never pay this bill, they own the bankers and the lawmakers. You need to get over that bit of foolishness and figure out how to make sure paying the bill doesn't break you and your family.
There's a sentence in this book that explains a lot of the semi-recent headlines.
"After the introduction of the euro, capital flowed freely; and countries such as Spain, Portugal, Ireland and Greece imported lots of foreign goods, borrowed heavily, and built up very large unsustainable external debts in a currency they could not print or devalue."
One of the "traditional" methods that governments have for paying down their borrowing is to inflate their currency, so as to use less valuable (in terms of goods and services which one can purchase with them) dollars, e.g. When you take away this ability by assigning the "value" of a currency to a central authority, as happened in the Eurozone, governments which behave irresponsibly with their money cannot take advantage of this tactic. And the unrest begins.
What was rather novel about this book was that Mauldin doesn't appear to be selling precious metals, like most inflationary Cassandras. In fact, he doesn't really push buying gold, merely mentions it as part of a balanced portfolio.
I found interesting Harry Browne's Permanent Portfolio, proposed in 1981, which apparently has had a pretty steady, though not spectacular, return over several decades.
25 percent in U.S. equities, which tend to do well when economic times are good.
25 percent in gold and precious metals to protect yourself against inflation.
25 percent in Treasury bonds, which normally do well when the economy is slowing, and in a recession.
25 percent in cash, which adds stability to the portfolio
Worth considering.
Mauldin makes a claim, based on statistics, I'm sure, that,
"With interest rates so low and inflation eroding their income as the cost of living rises, older people cannot afford to retire and are often beating out younger jobseekers in the job market because they have more experience and are willing to work as hard as the young people."
As a person rapidly approaching the "older" worker status, my experience and that of my cohort seems to be that many companies are actually letting older workers go, and replacing them with younger workers, strictly for financial considerations - younger workers will work more cheaply, while older workers have commanded higher salaries. There may be some countercurrents to this in the entry level Wally World jobs, but older workers are being given "early retirement" in droves, and many of them are having serious difficulty finding new jobs comparable to the ones they are leaving. Take it all with a grain of salt.
A good book, with some good strategies for managing your family's nest egg over the coming decades, I believe, but nothing truly revelationary here.
I even learned a new (to me) term - rentier capitalist - one who no longer works for a living, but makes their living by "clipping coupons", collecting dividends, spending interest on accumulated capital.
The point of all this rhetoric, of course, is to tell a cautionary tale, which can be summarized thusly:
"Since there can actually be no such thing as a government raising revenue at no cost, simple logic tells us that someone has to pay. It is impossible to know in advance who will pay for a central bank's 'free lunch,' only that someone, somewhere will eventually pay."
So enjoy all your free lunches, folks. At some point, the bill will come due, and whatever working stiffs are left in this country (and others) will end up paying the tab. If you think The Rich are going to pay, you haven't been paying attention. The Rich will never pay this bill, they own the bankers and the lawmakers. You need to get over that bit of foolishness and figure out how to make sure paying the bill doesn't break you and your family.
There's a sentence in this book that explains a lot of the semi-recent headlines.
"After the introduction of the euro, capital flowed freely; and countries such as Spain, Portugal, Ireland and Greece imported lots of foreign goods, borrowed heavily, and built up very large unsustainable external debts in a currency they could not print or devalue."
One of the "traditional" methods that governments have for paying down their borrowing is to inflate their currency, so as to use less valuable (in terms of goods and services which one can purchase with them) dollars, e.g. When you take away this ability by assigning the "value" of a currency to a central authority, as happened in the Eurozone, governments which behave irresponsibly with their money cannot take advantage of this tactic. And the unrest begins.
What was rather novel about this book was that Mauldin doesn't appear to be selling precious metals, like most inflationary Cassandras. In fact, he doesn't really push buying gold, merely mentions it as part of a balanced portfolio.
I found interesting Harry Browne's Permanent Portfolio, proposed in 1981, which apparently has had a pretty steady, though not spectacular, return over several decades.
25 percent in U.S. equities, which tend to do well when economic times are good.
25 percent in gold and precious metals to protect yourself against inflation.
25 percent in Treasury bonds, which normally do well when the economy is slowing, and in a recession.
25 percent in cash, which adds stability to the portfolio
Worth considering.
Mauldin makes a claim, based on statistics, I'm sure, that,
"With interest rates so low and inflation eroding their income as the cost of living rises, older people cannot afford to retire and are often beating out younger jobseekers in the job market because they have more experience and are willing to work as hard as the young people."
As a person rapidly approaching the "older" worker status, my experience and that of my cohort seems to be that many companies are actually letting older workers go, and replacing them with younger workers, strictly for financial considerations - younger workers will work more cheaply, while older workers have commanded higher salaries. There may be some countercurrents to this in the entry level Wally World jobs, but older workers are being given "early retirement" in droves, and many of them are having serious difficulty finding new jobs comparable to the ones they are leaving. Take it all with a grain of salt.
A good book, with some good strategies for managing your family's nest egg over the coming decades, I believe, but nothing truly revelationary here.
November 3, 2019
I'm sorry, probably I'm thick, but this seems to me fail in almost all it sets out.
Macro is incredibly complex and Mauldin & co. meander from very basic explanations to extremely opaque or wide ranging claims, without any middle-steps.
As such I can't verify their conclusions and don't end up with a working mental model of anything.
They are passionate and rambling, but don't provide anything where you could learn or understand.
They try to convince but not to teach. And convince they do only if you take everything by their word.
It seems like a rambling collection of somewhat connected blog posts.
The book is very thin on the practicals and the plots are the worse I've seen in long time (axes without proper labels and misleading captions, make some plots completely mysterious).
I'm not saying they are wrong. But I am saying this book is no good.
Macro is incredibly complex and Mauldin & co. meander from very basic explanations to extremely opaque or wide ranging claims, without any middle-steps.
As such I can't verify their conclusions and don't end up with a working mental model of anything.
They are passionate and rambling, but don't provide anything where you could learn or understand.
They try to convince but not to teach. And convince they do only if you take everything by their word.
It seems like a rambling collection of somewhat connected blog posts.
The book is very thin on the practicals and the plots are the worse I've seen in long time (axes without proper labels and misleading captions, make some plots completely mysterious).
I'm not saying they are wrong. But I am saying this book is no good.
October 1, 2019
By far this is the best and the most comprehensive book/material that I read about investing and a macro view of the economy. It explains many things that we usually never grasp reading financial infos or any media.. things like QE where it's everywhere and no one wants to call it printing money.
For someone who like to actively manage his money or at least being curious about that, this is the book to go for
For someone who like to actively manage his money or at least being curious about that, this is the book to go for
April 19, 2019
I actually haven’t read this book. I thought it’s worth making the point that it was first published in 2013 and the “coming crisis” is yet to arrive as I write this in April 2019. If you stayed out of the stock market in the past six years, you would have missed on a lot of upside.
July 4, 2017
Great insight on the current state of world economics after years of loose monetary policy by the world's leading central banks.
July 6, 2019
Long on historical macro economics. Short on strategies to deal with projected crisis.
September 7, 2020
Interesting analysis. I agree with another reviewer that it was thin on solutions.
November 10, 2020
Not as straightforward as it presented itself to be, as seen from an amateur’s lens. Feels like it’s worth constant rereading to grasp what’s being discussed here.
January 10, 2022
A story that is told over and over as civilizations rise and fall.
March 2, 2017
An interesting book, once you get past the jargon and insider's perspective... not exactly a textbook discussion on economics but has some good points about QE, the Fed and inflation that are prudent to be considering at this time.
February 7, 2015
Code Red explains the gargantuan risks global policymakers are infusing the economic system with admirable simplicity. Authors make complex subjects simple enough to understand for those without any economic training. The style is rhetorical and repetitive - as a result, the reader is in no doubt of the message or the conclusions.
The book suffers from two major faults. The authors ignore their own warnings by not focussing on alternative outcomes, at least for the next few years or decades. They repeatedly point to the economists' inability to forecast not just the next few months but even past few months! Separately, they extol the virtues of human creativity. Yet, they fail to provide any alternatives to the economic doom they predict in coming years. They fail to consider what next post the currency wars in terms of policymakers and political responses if they are again hell bent on deferring the apocalypse. The authors are likely to agree that they would not have forecasted QEs or possibly their successes like most pessimistic macro forecasters post 2008. As a result, it is too naive to not consider another round of some other ingenious policies that push back the day when it all has to unravel. Or even completely solve the issues. I am in the authors' camp in terms of risks and worries, but I would not expect the world to plunge into the economic abyss without ever more struggles.
The investment conclusions are mostly lame. They are not only too broad but the basis provided for the selection is rarely adequate. At times, they contradict the conclusions from the themes too. The authors could have been better off providing scenario analysis and event pointers than the straightforward recommendations (hold equities until abc and then sell or switch to gold if/when you witness xyz etc).
The book suffers from two major faults. The authors ignore their own warnings by not focussing on alternative outcomes, at least for the next few years or decades. They repeatedly point to the economists' inability to forecast not just the next few months but even past few months! Separately, they extol the virtues of human creativity. Yet, they fail to provide any alternatives to the economic doom they predict in coming years. They fail to consider what next post the currency wars in terms of policymakers and political responses if they are again hell bent on deferring the apocalypse. The authors are likely to agree that they would not have forecasted QEs or possibly their successes like most pessimistic macro forecasters post 2008. As a result, it is too naive to not consider another round of some other ingenious policies that push back the day when it all has to unravel. Or even completely solve the issues. I am in the authors' camp in terms of risks and worries, but I would not expect the world to plunge into the economic abyss without ever more struggles.
The investment conclusions are mostly lame. They are not only too broad but the basis provided for the selection is rarely adequate. At times, they contradict the conclusions from the themes too. The authors could have been better off providing scenario analysis and event pointers than the straightforward recommendations (hold equities until abc and then sell or switch to gold if/when you witness xyz etc).
April 13, 2014
Code Red is a must read if you'd like to understand, in the simplest terms, the risks that confront the world's developed economies as Central Banks of the World continue to print money, purchase government and private debt instruments and force near-zero interest rates. John Mauldin is careful to explain that the outcome is not certain....for the level and duration of Central Bank loose money policies has never been tried on this scale before. There is no real precedent. But there are risks....potentially huge risks as the World economies venture into uncharted territory. Code Red explains the mechanisms behind the devaluation policies: Quantitative Easing; Zero-Interest Rate Policy; Central Bank purchases of government and private debt; and currency wars. He also highlights the victims of the loose money policies....the elderly who depend on fixed income investments, who's rates effectively become negative after deducting the rate of inflation from the low earned interest rates. This is the source of the more and more discussed concept of financial repression. Code Red did a masterful job explaining the policies and the risks, though it did a rather poor job of recommending investment strategies to guard against the potential future impacts. Mauldin should have left this for another follow-up book and then done the subject real justice. I do highly recommend Code Red....a highly enjoyable and informative read.
December 26, 2014
The analogy to A Few Good Men in the use of the term Code Red seems perfect when describing how the economic crisis is being handled by so many governments. I've read a lot of books on the economy and this one goes to the top of the list because the content was provided in a such a clear and easily understandable fashion. Let's face it, economic systems can be pretty dry, so it's nice to read a book that puts it all in terms anyone can understand.
March 11, 2015
In this book, John Mauldin does an admirable job of explaining our current economic crisis and how we got here. I feel smarter, and more scared, after reading his work.
Smarter because I can understand more concepts. Scared because of the forthcoming pitfalls, traps and decisions (or lack of decisions).
January 26, 2014
Good financial advice (yes, diversify). Descriptions of the trouble the Fed has got itself and us into, and theories as to why (they are afraid to do nothing lest they be accused of doing nothing, and all they have left to do is to continue the QE). Interestingly, Mauldin thinks the Japanese economy will be the first to implode, and his biggest investment is in shorting Japan.
July 16, 2014
Exellent read for preparing for what is coming due to the policies of loose monetary policy. Be educated, be prepared, and be ready to protect your wealth during the coming cycle of rising interest rates and inflation. Book is very detailed about where to invest, how to protect, and a great piece of educational advice, as well as being prepared when we start seeing things improve once again.
March 14, 2014
This is the second book I've read by Mauldin and Tepper. I can't say enough about them and would recommend reading all of their books.
January 27, 2014
Some very balanced and well considered macro analysis leading to some very simple and fundamental investing outcomes known for a long time.
February 13, 2014
A book that explains in plain language what the future is like after massive money printing by all the central banks... I totally understand everything!
April 6, 2014
A great dogma-free book covering economic and financial views in a systematic ways. John finally discovers Michael Pettis and Didier Sornette.
Read
March 27, 2014Guns and gold.....
April 7, 2014
An outstanding analysis of the world economy and the impacts of central bankers on the future.
December 13, 2014
Very clear explanation of the current world economic situation and provides ideas of what to do to minimize the risk to your personal savings.
July 31, 2015
Good overview of financial markets for non-finance persons.
Displaying 1 - 30 of 31 reviews