Investing in the Age of Sovereign Defaults: How to Preserve your Wealth in the Coming Crisis

Preface

Why Another Book on the Financial Crisis?

A mass of sovereign defaults, broadly defined, is looming on the horizon as the global financial crisis that began in 2008 lumbers on. The primary objective of this book is to come up with some answers for investors who, by and large, will be the ones defaulted on. Worse than that, governments desperate for money will look to the so-called “rich” and the more advanced in age, aka the investor class, to plug the yawning gaps in government budgets. In all countries affluent elders will be pitted against their or somebody else’s children. In some countries, affluent investors from “elite” racial groups or castes will be pitted against different and allegedly downtrodden castes or racial groups. The reelection of Barack Obama and Democratic control of the Senate will accentuate this process in the United States.

A simple observation was the spark that created the incentive to write this book. Today the world’s richest, best educated, most democratic—can we say most civilized—countries are headed for bankruptcy and default. Nobody is surprised when poor countries with their imperfect institutions, corrupt leaders, and low levels of education go bankrupt. But the rich, advanced countries? This was not supposed to happen.

This observation immediately raised two questions, which this book will try to answer. One, how did this happen? And two, how can investors preserve their wealth through the chaos ahead?

The terrible experience of German ...