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

The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel | Stephen Leeb, Glen Strathy | Driver Beware -- How can you Diversify

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The Coming Economi...

	The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel Stephen Leeb, Glen Strathy Business Plus, 2007 - 224 pages average customer review:based on 70 reviews view larger image
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highly recommended

Stephen Leeb shows how hard times can be a boon for smart investors. As the world faces an energy crisis of unprecedented scope, renowed economist Stephen Leeb shows how surging oil prices will contribute to an economic collapse. With meticulous research and analysis, Leeb shows that due to strong competition from India and China, prices could soon double, a cost for which most countries and investors are ill-prepared. Now, in this groundbreaking book, Leeb not only shows how this crisis will affect consumers, but how savvy investing can turn these dire times into financial gain.

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Collapsing Now?

They were calling Stephen Leeb 'the $100 a barrel man' when he first predicted this phenomena a few short years ago. Now he's looking at $200 and the mainstream media oil and finance pundits are slowly catching up with him. He is one of a number of writers who are warning that we are now in for an increasingly difficult times economically and that there are ways to benefit from the downturn. He is scathing of Wall Street and associated group think and warns against the herd instinct.

Leeb gives very clear advice on where to place one's investments and these include: gold related stocks and bullion; oil service companies. He recommends 'Chindia' which is the name he gives to the fast growing markets of China and India, targeting specific multinationals which are moving into these markets with products and experience which will make them successful.

This is not just a book on finance and oil though. His frame of reference is much wider drawing, as he does, on the work of two writers who have described what happens when civilizations fall apart. This is the context is which the book is written: the work of Jared Diamond in 'Collapse' and Jo Tainter in 'The Collapse of Complex Societies'. Mr. Leeb is convinced that the worst may be about to happened to our civilization. He gives good advice on how to deal with that and with scenarios of lesser magnitude. I found it most useful.

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Driver Beware -- How can you Diversify

This is the investor's guide to Peak Oil. If you are not both an investor and a subscriber to the theory behind Peak Oil, then this book will leave you a little lost. As it is, though, this book provides an answer to some questions that are otherwise never discussed elsewhere.

The premise is straightforward: the smart investor makes money by anticipating change and preparing for it. In this case, Leeb first sets out to explain why Peak Oil claims have some merit. He does not sound like Kunstler. He's got a cooler head, which I can really appreciate. He explains the problems at Ghawar as well as the visions of people like Matthew Simmons and Hubbert.

He is not just bucking the assumptions of geopolitics, though. He also takes Modern Portfolio Theory to task. That approach, which asserts that no investor can anticipate anything with regularity, advises people to seek the maximum expected risk-reward return. He goes over some of the famous geniuses who have rejected its assumptions - value investors like Buffett and the reflexivity theory of Soros.

Its not until the last chapter that he makes his specific investment suggestions. They are broad, but not just sectoral. He listed a few companies (FPL, the Canadian Oil Sands, Nabors) as well as sectors (gold, oil, alternative energy).

I read this book in about 10 hours. Its not meant to be that complicated. Maybe if the problems of the future weren't so visible over the horizon, it would need to be more eloquent. But it doesn't need to be, so its not.

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I hesitiate to give it even 3 stars,

but the book does contain information that is provocative and worth consideration.

The writing can best be described as "lazy." If I were reviewing just on the merits of the writing, this book would get 1 star. There is no excuse for anyone to put a literary product on the market that is as shabbily written as this one is.

For starters, Dr. Leeb switches voice four times throughout the book. He starts out with "I," then abruptly begins speaking as "we" on page 13, right in the middle of a chapter. Towards the end of the book, he goes back to "I," then again switches to "we."

The author has a penchant for revising history to fit his theories. For example, he portrays the 70's as just one economic step above the Great Depression, and even goes so far as to blame the homelessness of the 80's on the previous decade's financial turmoil (p 105).

Other examples:
The Iran-Iraq War ended in the "early 80's" (p. 84)
The Great Depression ended in 1944 (p. 110)

And listen to this one: "If the bursting of the tech bubble in 2000 was a rain shower, then a bust of the housing boom today (written in 2006) would be a Category 5 hurricane. But that is exactly why we do not think it will happen." (p 179)

Nevertheless, Dr. Leeb puts forth some provacative concepts that are worthy of consideration, including the role of China and India (Chindia) in Peak Oil scenarios as well as "Groupthink," aka "herd mentality."

In addition, the author lays out a comprehensive investment plan that would, assumably, prosper during a protracted energy crisis. In my opinion, the investment suggestions should only be considered as a starting point for further research, rather than an iron-clad guarantee of success. The author's shoddy writing style casts a dubious shadow on all of his research and theories, and makes his investment suggestions suspect at best.

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starts strong, then falters

"The Coming Economic Collapse" starts with a fairly concise review of the coming decline in availability of fossil fuels. The author, Stephen Leeb, summarizes the inevitable stresses in society that will occur when we no longer have cheap energy. This summary gives a much needed warning about how unpleasant life may become if we pursue our current fuel-guzzling ways.

After a good start, though, the rest of the book falters dramatically. The author spends countless pages giving advice about investing, as if investing will really make anything better in the big picture. He even sinks to the level of giving advice about specific stocks; advice like this is guaranteed to be out of date almost as soon as the book is published.

If you are interested in a good summary of peak oil and the coming economic crisis, the beginning of this book is quite good.

For better understanding, though, about what to do about the crisis, I would recommend the seris of books by Richard Heinberg, especially "The Oil Depletion Protocol."

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