The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel

by Stephen Leeb

Book Overview

Economist Stephen Leeb shows how surging oil prices will contribute to a huge economic collapse by soaring to over $100 a barrel - and tells how you can avoid the pitfalls of the upcoming crisis.

• Format: Hardcover
• Language: English
• ISBN: 0446579785
• ISBN13: 9780446579780
• Release Date: February 2006
• Publisher: Business Plus
• Length: 211 Pages
• Weight: 0.90 lbs.
• Dimensions: 0.9" x 6.2" x 9.4"

Customer Reviews

Financial Seer

This is an outstanding view of the truly valuable investment vehicles: finite rescources. He has been right for decades now to everyones suprise.

Investment guide/nonpartisan introduction to the coming energy crisis

For those who aren't familiar with the issues surrounding the peak in oil production, this easy-to-read book provides a short introduction to the hard times ahead. It also serves as a resource for those investor-types who want to try to surf that chaos and make a tidy profit. The authors, both experienced financial writers, set the stage for discussing the imminent oil shortage and its consequences by recounting the late-90s tech bubble and the fact that few investors noticed the unsustainability of this bubble. "The oil delusion is a mirror of the technology delusion. While almost everyone in 1999 believed that the bull market in technology would endure, almost everyone today believes that the bull market in oil is temporary" (12). Needless to say, the authors don't share this assessment of the oil market and go to great pains to explain their contrarian conclusions. The coming peak in oil production (whether this year or in 20 years), the increasing insecurity of American oil supplies, and the growing need for energy resources in China and India are creating "a clash between supply and demand that will send oil prices soaring to unprecedented levels" (19). According to the authors, the only thing that will postpone this hyper-bull market in oil is a worldwide depression, a situation that none would consider beneficial. The near-future scenario outlined by the authors is similar to that predicted in other works on peak oil; in short, it entails at best a massive depression and reduction in societal complexity, and at worst the complete collapse of the economy and of civilization as we know it. "[A] crisis of epic proportions is brewing" (89). They assert that this crisis can be prevented or at least mitigated against and they repeatedly affirm their hope that it will be. However, they also recognize the profound failure in American leadership and the profoundly deluded perceptions of our economists, media, and citizenry about this looming crisis. In the 10th chapter, they outline a few possible visions of what the world of the near-future might look like---decline, stasis, or Armageddon---none of which options is particularly appetizing to someone raised in a world of boundless growth and opportunity. The primary author, Stephen Leeb, holds a PhD in psychology, and he uses this expertise to articulate the blind spots of conformity and groupthink that are contributing both to this crisis and to the fortunes that will be lost with the economic downturn. Wise investors like Warren Buffett and George Soros have succeeded because they've not followed conventional wisdom. Likewise, the reader is challenged to abandon groupthink and to grapple with the reality of this looming crisis, both for reasons of personal financial success and for reasons germane to the whole of human civilization. It is in the final two chapters that the authors outline their preferred investment classes and strategies for growing wealth in the hard times ahead, so if you

Opportunity knocks

The title of the book is aptly chosen to describe what lies inside. Yes, there is a problem of soaring energy prices and at the same time it offers a rare opportunity to multiply our investments several fold if we make the right portfolio choices. The book is a logical continuation of the previous book "The Oil Factor" by the same author. Oil prices have almost doubled since the Oil Factor was published two years ago. While the Dow has been relatively quiet since then, select investments in commodities especially in gold and silver have given handsome returns during this period. Energy prices are heading northward, led by oil, thanks to limited supplies on planet earth. We also have huge associated problems due to the burning of fossil fuels and disposal of nuclear waste. Discovery of major oil reserves ( like the Saudi "Ghawar" examined in detail in "Twilight in the Desert" by Matthew R. Simmons) remain a remote possibility even statistically. On the other hand China and India are fast accelerating into the international highways for their due share of energy consumption. As a society we fail to understand and refuse to accept oil as a diminishing resource due to "group think" says Dr Leeb, citing several examples of failures of old civilizations, quoting extensively, particularly from another excellent book "The Collapse" by Jared Diamond. The book then turns to the economic consequences that we are likely to face soon in an era of high energy prices and the portfolio choices that can protect and even grow our investments. The thread that links prices, inflation, interest rates, impact on various industries and finally their profitably and stock prices is woven extremely well. Alternate energy sources are discussed, but in my opinion deserves better treatment. Dr Leeb examines and challenges the Modern Portfolio Theory and argues that instead of staying invested in the market as a whole, and while a majority of fund managers actually under perform in comparison to market performance, the most successful investors like Warren Buffet have made fortunes by investing in select stocks that turned ten baggers. In the context of rising energy prices, when the "oil factor" is positive, inflationary pressures can have a devastating effect on economies. The American economy is particularly more vulnerable due to its huge oil imports and rising trade deficits. Alternate options and possibilities that may be adopted by Central Banks and Governments to fight the inflationary pressures under rising energy and commodity prices are discussed well. It is precisely in such a scenario that we come across several investment opportunities that are not only the best bets to beat rising inflation and weak markets but perhaps also to make a fortune. A separate chapter lists these opportunities, starting with Gold. To recall an old saying - When opportunities knock at our doors most people complain of noise. Very few rush to open the doors and embrace it with op

Get out of oil-dependent assets, as long as politics corrupt, energy policy will never be real

I am giving this book a 5 instead of a 3 or 4 because I believe that it does a superb job of laying out some facts that every normal adult needs to understand, and I want to encourage everyone to buy and read this book. That having been said, I also found it disappointing. The author's main points can be summed up in this review, and take less than an hour to absorb in the actual book: 1) Peak oil and the need for alternative energies are being over-shadowed by myopic media and lack-luster academics that focus on poverty, climate change, terrorism, everything but the core Achilles heel of the Western world, its addiction to cheap oil which is no more. 2) Cheap oil is made possible by blatant political and financial maneuvers that enrich a few and set the rest of us up for life long poverty. Government subsidies and tax breaks purchases by expensive lobbyists giving expensive gifts and cash bribes to our politicians are directly responsible for pre-determined failure of our energy policy and the lack of an energy strategy. 3) The catastrophic nature of the collapse of cheap oil is dramatically enhanced by the combination of the *huge* U.S. deficit and by the increased prospects of war over oil. The author concludes with some bottom line advice for investors: get out quickly from stocks associated with high oil usage (airlines, autos, chemicals; followed by cosmetics, food requiring processing and transport, and retail dependent on far away factories and raw materials). I disagree with one key point he makes. He assumes that Wall Street and the media have been ignoring this problem because of "group think." I certainly do agree that the larger mass of the public and the average bureaucrat that do not know any better have fallen prey to unethical propaganda, but I am quite persuaded by Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy; Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil; The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century and other books that this catastrophe in the making was clearly understood by the White House and the US Senate in 1974-1979, and a very deliberate selfish even treasonous decision was made to profit in silence and let the people fry. This is a much simpler book than most of the others I have read and recommend, but I give it a solid five stars because if you can only afford to buy and read one book, this is the one that will be easiest and most to the point. And just to drive the point home, when WIRED had the cover story on alternative energy, Cheney was meeting secretly with Enron and Exxon, and went on to amass 25 documented high crimes, 23 of itemized in my review of this book (Cheney makes Agnew and Johnson look like wall-flowers--this is the guy that put HIGH into "High Crimes." Vice: Dick Cheney and the Hijacking of the American Presidency

Right on the money

I have been reading Leeb on and off for more than 20 years. While he has not been perfect I can say that the jacket copy in the book is right on. On the big trends he has been unfailingly right and for the right reasons. For example, in his book during the mid-80's his premise for the big bull market was based on predicting a dramatic and sustained decline in inflation. Nor was he bearish on tech simply because tech stocks were richly valued (though that was certainly part of the reason) but rather because he rightfully felt that information technology was not up to solving society's major problems such as energy. His most book before the present - The Oil Factor - was clearly right on and again for the right reasons. Given Leeb's record his latest book is truly frightening. We are ignoring a crisis which if ignored much longer could become truly catastrophic. Frustrating is that there are solutions but not the will or willingness to apply them. The review from the reader in Eugene, Oregon is evidently typical of the ignorance that is so pervasive is this country. That reviewer dismisses wind as an alternative with fatuous factoids. Leeb's conclusions on wind come from peer reviewed articles by Stanford professors. As a parent and investor - one who has made a lot of money with Leeb's advise - I urge everyone to read this book and take it very seriously. It may not be too late in the day but it is very late in the day.