HardAssetsInvestor

Mike Norman, anchor, HardAssetsInvestor.com (Norman): Hello everybody, and welcome to HardAssetsInvestor.com’s interview series. I’m Mike Norman, your host. Well, are we headed for a depression, and if so, what can you do about it? My guest today is here to tell us. He is Martin Weiss, author of the “The Ultimate Depression Survival Guide,” and economist. Martin, thanks for joining me on the show.

Martin Weiss, author, “The Ultimate Depression Survival Guide,” (Weiss): Thank you for having me.

Norman: Well, the book just came out recently and it shot up to the No. 1 position on the Wall Street Journal Book Review and also on Amazon.

Weiss: It’s No. 1 on Amazon and it's on the Wall Street Journal best-seller list. It’s not No. 1 on the Wall Street Journal yet, but it should be soon.

Norman: Hopefully after this program, it will be. So the book is titled “The Ultimate Depression Survival Guide.” We discussed it a little bit. You’re obviously worried about things that might happen … the situation’s looking pretty scary for lots of people right now. What you’re saying ... look, if we go into a bad period, there are things you can do, there are things to protect yourself. That’s what you talk about in the book. Let’s get a little bit of an overview.

Weiss: Well, first of all, whenever you see a government-inspired intervention, a government-inspired rally in the stock market or a recovery in the economy, to me that’s an opportunity to get out.

Norman: Really?

Weiss: That’s an opportunity to do what you wish you had done in 2008 before the stock market tanked. It’s what you wished you had done with your real estate properties before the real estate market collapsed.

Norman: But what if you had done that, though? Let’s look back in history. It seems from that statement that you just made, you are averse or you view government intervention as a backstop, as a countervailing force in an economic downturn – you see that as bad. But what if you would have gone against that in the 1940s? You would have lost a lot of money.

Weiss: Oh of course. It depends on time. I’m saying in this era, in the beginning of the 21st century, we are in a decline, fundamental decline that’s going to continue, but it’s not a straight-down move, just like any market. Therefore, when you have a countermove, that’s your opportunity to sell; that’s your opportunity to reduce your risk and build cash. Now we have, because the government has done so much, and I know you’re in favor of that ...

Norman: I am.

Weiss: ... but precisely because the government is doing so much, you may have a bit of an uptick, but I don’t see it as a change in trend. I think that a depression, a deep depression is essentially inevitable and unavoidable. Let me explain what I mean by a depression. A depression is a multiyear decline in the economy, bring massive unemployment and delivering widespread financial losses to the majority of the population.

Norman: All right, but by that definition, we’re already in it.

Weiss: Exactly my point. You guessed what I was about to say, and it’s that we’re already in it, but there’s no sign that’s it over yet. There’s a lot of hope that it would end prematurely, but I don’t think it will, and I’ll explain why.

Norman: Now, things are bad; I’m going to let you explain why. But just from the standpoint of observation, things are bad; there’s no question. Twelve million people have lost their jobs in the last year, the stock market has experienced one of the worst declines in history, not just here but around the world. We have a massive credit crunch and problems in the banking system. Yet when you walk around here in New York and other places around the United States, you don’t see soup lines, you don’t see the sort of visuals that we at least read about from the Great Depression.

Weiss: We’re not there yet.