You Can Profit From a Monetary Crisis, by Harry Browne, New York: Macmillan Publishing Co. Inc., 1974, 397 pp., $8.95.
In 1970 Harry Browne published HOW TO PROFIT FROM THE COMING DEVALUATION. It became a national bestseller. Harry became an internationally known investment counselor and his views on the significance of monetary developments are in great demand.
Anyone who had acted on Harry's investment recommendations since 1970-71 has seen his gold mining stocks triple, his silver bullion double, and his Swiss francs appreciate as much as 60 percent vis-a-vis the dollar.
Last year Macmillan published Harry's second book, HOW I FOUND FREEDOM IN AN UNFREE WORLD. It is a noneconomic treatise of a wholly personalist libertarian philosophy, whose theme is pursuing your own freedom and happiness without having to change the world or the people around you.
Now Harry has come out with the long awaited sequel to DEVALUATION; it was released by Macmillan in February. YOU CAN PROFIT FROM A MONETARY CRISIS comes to grips with the whole range of market dynamics, rather than focusing just on the monetary situation as in the first book.
Few people really understand the magnitude of the present world economic situation and what it will lead to. Each individual should have an understanding of the basic economic problems that afflict the U.S., as well as a grasp of the underlying forces that are bringing the world to a general monetary collapse.
The current economic and political events that are unfolding are not isolated incidences, nor are they inexplicable. They are part of an inevitable pattern of consequences brought about by previous causes that can be easily identified.
The first part of the book is a succinct explanation of the principles of cause and effect of economic laws. And it is one of Harry's basic premises that with an understanding of objective economic laws, the appropriate investments for the rational individual become self-evident.
Given a rapidly depreciating currency, hyperinflation, a devastating five year bear market, wage and price controls, continual balance of trade deficits, and an accrued balance of payments deficit of over $100 billion, it would be prudent to not have dollar-related investments.
These investments include: common stocks, bonds, mutual funds, and real estate, not to mention the more obvious losers like savings bonds, social security, and savings accounts. Even diamonds, art, and numismatic coins can be vulnerable, if one's investment objectives are safety and preservation of assets in light of all possibilities.
Given a fiat currency monetary system since 1968 and no convertibility since 1971, it would be prudent to exchange dollars for currencies with gold backing and convertibility. Here Harry is extremely helpful in providing a comparative analysis of foreign currencies in terms of gold backing reserves and their relative value to the dollar and to all other currencies.
Given the very likely possibility of runaway inflation and the social and economic chaos that would bring (along with the probability of martial law and dictatorial government), it would be prudent to have your assets out of the country and a retreat out in the hinterland. In fact, for optimum safety, Harry suggests having everything in Switzerland, except your retreat!
As for investments in the "barbaric relic," Harry prefers South African gold mining stocks (kaffirs) to U.S. or Canadian. As for gold coins, he prefers those with the lowest numismatic premiums. And as for gold bullion, nice work if you can get it! Harry believes the potential for gold is $200 by year end and at least $500 by 1978.
Harry also foresees an explosive price situation some time in the next few years that will drive the price of silver through the roof. He sees the potential in the next two to five years for $10 silver as very probable because of the monumental imbalance in supply and demand for the white metal.
In addition, Harry discusses the merits of some speculative types of investments that are suitable for the bolder investor in these times of monetary crises, such as margin accounts, commodity futures trading, currency futures, and short selling common stocks. The book also contains sections on sample investment programs, where and how to get information, recommended reading, charts, and a glossary.
In sum, YOU CAN PROFIT FROM A MONETARY CRISIS will give the reader a grasp of the nature of the monetary mess and what he can expect to happen in the foreseeable future. It is, therefore, prudent reading for any individual who would like to preserve his (or her) personal autonomy in the coming years—where nothing less than investments for survival will do.
Ray Pastor is a Commodity Account Executive with Hayden Stone Inc., White Plains, New York. He has a finance degree from the University of Miami, an M.A. from the University of Maryland, and was formerly associated with the Pacific Coast Coin Exchange New York Office.
This article originally appeared in print under the headline "You Can Profit From a Monetary Crisis".