THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

CONTENTS

Book information

Author information

Technical details

Contact information

Sample chapters

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

BOOK INFORMATION

ADVFN Books’ latest release The Death of Wealth chronicles the tumultuous financial events of 2012 and concludes that that we’re heading towards the Death of Wealth.

Question: what is the next economic game changer?

Answer: The Death of Wealth.

Market guru Clem Chambers dissects the global economy and the state of the financial markets and the world’s economies and lays out the evidence for the death of wealth.
The Death of Wealth flags up the milestones on the route towards impending financial disaster. From the first tentative signs of recovery in the UK and US markets at the start of 2012, to the temporary drawing back from the edge of the Fiscal Cliff at the end, the book chronicles the trials and tribulations of the markets throughout the year.

Collecting together articles and essays throughout the last twelve months along with extensive new analysis for 2013, The Death of Wealth allows us to look at these tumultuous events collectively and draw a strong conclusion about what the future holds.

With an introduction by renowned market commentator and stock tipster Tom Winnifrith and a summary by trading technical analyst Zak Mir, this collection chronicles the rocky road trip the financial systems of the world have been on, and predicts the ultimate destination: the death of wealth as we know it.

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

AUTHOR INFORMATION

Clem Chambers is CEO of leading, global stocks and shares information site, ADVFN (www.advfn.com). Credited with steering the company from likely dot.com failure to thriving market leader, Clem’s intricate knowledge of the workings of financial markets is highly sought after by broadcasters such as the BBC, CNN and CNBC, on whose networks he regularly appears as a commentator. His fourth novel The First Horseman was published last year by No Exit Press. He has written investment columns for Internet bible Wired Magazine, which described him as a ‘Market Maven’, and writes regularly for Your Trading Edge, Index Trader, Gulf News, Mac Format, Inversionista and Trader’s magazines, as well as the Scotsman and Forbes.com.

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

TECHNICAL DETAILS

- Price: £4.11

- Format: Kindle Edition

- File Size: 2,158 KB

- Publisher: ADVFN Books

- Sold by:  Amazon Kindle Store

- Language English

- ISBN: 978-1-908756-12-1

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

CONTACT INFORMATION

Press Department
ADVFN Books
3rd Floor, 26 Throgmorton Street,
London EC2N 2AN

Email: bookspress@advfn.com

Phone: +44 (0) 207 070 0932

ADVFN Books website: http://www.advfnbooks.com

Contact us and ask for a review copy of The Death of Wealth

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

SAMPLE CHAPTERS

Contents

Sample 1: Prologue

Sample 2: Charts for January 2012

Sample 3: January 2012: US Recovery Means the End of the Bear Market

Sample 4: January 2012: Three Questions Facing Capitalism

Sample 5: January 2012: Markets Start to Recover – But Is There Trouble Ahead?

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

SAMPLE CHAPTER:

CONTENTS

Introduction by Tom Winnifrith

Prologue to The Death of Wealth

JANUARY 2012

Charts for January

US Recovery Means the End of the Bear Market

Three Questions Facing Capitalism

Markets Start to Recover – but is there Trouble Ahead?

FEBRUARY 2012

Charts for February

Perma-bears Beware: 2012 Looks Bullish

Economics: Political Plaything

Long-term Bear?

Resetting the Debt Mountain

MARCH 2012

Charts for March

Money Flows Like Water

The BRIC Miracle is Set for a Hard Time

The Summertime Blues

Provide For Your Old Age

APRIL 2012

Charts for April

The Bear is Poised to Strike

Spain is Bust

Spain will be the Centre of ‘Eurocrisis’ Action this Summer

Economy Still in Crisis

MAY 2012

Charts for May

Economic Disaster Ahead for the West

Euro-style Crisis to Hit America?

Woe Betide the Savers

Facebook Flops Onto the Market

Growth versus Austerity

JUNE 2012

Charts for June

The Public Sector is Doomed

Investors are in a Tough Spot

Four Trillion Needed to Fix Euro Crisis

A Federal Europe

JULY 2012

Charts for July

Europe: Financial Insane??

Now is the Time to Invest in Equities

Spain Returns to Meltdown

AUGUST 2012

Charts for August

A Fork in the Road

The Market Knows

It’s a Bull’s Game

SEPTEMBER 2012

Charts for September

We’re Due for a Crash

The ‘PIIGS’ Should Leave the Euro

Creating Money Won’t Solve Problems

OCTOBER 2012

Charts for October

Debt Crisis Consequences: World War III or 200% Inflation?

Why Can’t Countries Act Like Companies?

NOVEMBER 2012

Charts for November

Super Taxes on the Wealthy May Destroy Euro Recovery

How the World will Find the Global Economic Reset Button

DECEMBER 2012

Charts for December

US Economy Cannot Deal with its Debt

Falling Off the US Fiscal Cliff

Conclusion: How The Wealth Will Die

Summary by Zak Mir

Appendix: Exchange Prices

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

SAMPLE CHAPTER:

PROLOGUE TO THE DEATH OF WEALTH

Throughout 2012 I published articles about the state of the financial markets and the world’s economies. Now the year has ended and we venture through 2013, we can look back at the tumultuous events and draw a conclusion about what the future holds.

The book is called The Death of Wealth. An alarmist title, you may think. An exaggeration? After all, America’s fall off Fiscal Cliff has been averted (for now) so surely things can only get better.

However, the articles in this book point to a problem that still hasn’t been addressed: Western governments continue to spend far more than they receive in taxes, which as the Dickens character Mr Micawber points out in David Copperfield is not a sensible strategy: “Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

If only the sums and ratios were so modest.

2012 started with the US economy showing signs of recovery, and European markets recovering some of the ground lost during the euro crisis. It ended with Obama’s re-election and the deal that delayed the plunge off the fiscal cliffs by a few months.

In between, the euro’s problems continued, but none of the affected countries actually left the eurozone; quantitative easing tried to turn things around with the consequences of these “unorthodox” actions yet unknown; and the equity markets after the mid-year correction became strongly bullish.

This messy, and seemingly disparate, series of events did much to hide a greater truth that was emerging from them. Collectively the events are just milestones on a road towards a widespread death of wealth.

Now is the time to get to be prepared for this new reality.

In the conclusion to this book I state that the way developed nations will climb out of the financial hole they have dug themselves is to embrace inflation. I’m not advocating it, just highlighting the most likely path. I also predict a fundamental rebalancing, where the nations of the West get significantly poorer and the BRIC countries get richer.

The economic platform of Wealth as we know is crumbling, but this process will provide opportunities for those willing to take risks. As 2012 progressed the evidence for this became clearer and clearer; it is now a question of how we respond, as without adapting, we as individuals risk being dragged into the downwards spiral we can see spinning around us.

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

SAMPLE CHAPTER:

CHARTS FOR JANUARY 2012

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

SAMPLE CHAPTER:

US RECOVERY MEANS THE END OF THE BEAR MARKET

Recovery in the US indicates the end of a bearish five years for markets. What impact will this have on Obama’s re-election chances?

Timing the market is notoriously difficult. While it’s possible to accurately ‘see the future’ more often than not that future comes to pass much sooner, or later, than expected. For investors, 2012 will be all about timing.

The Maya thought 2012 would bring the end of civilisation. Here we have a great example of a superb prediction that was absolutely correct – only with terrible timing. The end of the world for the Maya was 1511 when the Spanish showed up (or perhaps 1697 when the last Mayan city fell to conquest). Either way, for the Mayans, the end of their civilisation came hundreds of years earlier than expected.

We can at least relax a little. The world is not going to end in 2012 – even though many financial pundits seem to think so. The benefit of making this prediction is if I’m wrong, no one will be around to tell me what a fool I was, whereas I can look forward to bragging rights if we’re all still around in 2013 – whether as an economy or as a species.

The key question is whether the rollercoaster ‘bear market’ of the last five years is over yet, or at least, about to turn around?

I think it is.

The US remains the key driver of the world economy. Amongst much gloom and economic trouble, the first green shoots of economic regeneration appeared there in 2011. The new growth is only now beginning to show up in official statistics. 2010 was a worse year than 2011 for the majority of small businesses – and it is within these ‘Mom and Pop’ operations that first signs of recovery traditionally show up.

This recovery is, of course, very fragile and difficult to measure but if the progress is sustained, the US will soon be on its way to a ‘bounce’.

This will not help the BRIC countries, which are entering a period of post-bubble bust.

Boom, bubble then bust is the fundamental cycle that repeats over and over again in markets. While the long-term future may be bright for all, in the economic medium-term, bust always follows bubble. The developing world has bubbled. Now it’s ‘busting’. The cycle will then repeat there, too, and recovery will follow.

It’s too early to predict how fast the US recovery will be. It seems sane to imagine the road back will be long and hard. There will be inflation, there will be realignment of the public sector and there will be austerity in segments of the work force that have previously had a good run. The recovery will not be quick, easy or painless. Nonetheless, the road out of trouble is a better path than the road down into yet worse times.

Equity markets are still being driven by the realignment of bonds and currencies . That’s set to continue. If you, like me, believe the giant bull market in bonds over the last decade is over, then it would make sense that equities will receive new attention and that this alone will drive prices up.

If you believe in the inflation story then likewise you will be bullish on stocks, or at least looking for somewhere to put your money that will not eat it alive as currencies fall in value in comparison to things of intrinsic worth.

If you believe in Obama’s re-election chances – and it’s hard to look at his proposed opposition and not conclude he has a good chance on that basis alone – then you will also expect a good year for stocks. History tells us almost all US presidents are re-elected. In most instances, this has occurred in a ‘bull market’ year.

In short, my three scenarios as follows:

- A bear market with strong bonds means a Republican election victory and more market mayhem.

- Weakening bonds indicate an uptick in US inflation; a buoyant Obama and an equity rally.

- A giant ball of fire in the sky means the Mayans weren’t so stupid after all.

As a lover of equities and a Brit with no interest in US politics whatsoever, I say ‘Vote Obama!’

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

SAMPLE CHAPTER:

THREE QUESTIONS FACING CAPITALISM

What does the Euro crisis mean for capitalism?

The problems with the euro are the same problems the world economy used to have with gold. Ironically, the weak economies of Europe are working under a kind of ‘gold standard’. The euro, of which Germany is/was keen to not debase, has acted like gold. The weak economies have simply not been able to compete with Germany and, as they are unable to print their own money, they have gone bust.

The euro has thrown them into recession and depression in the same way as gold threw the world into recession after the First World War.

However, when it comes down to it, euros are merely paper. To increase the world’s gold supply, you must of course go to much greater lengths than merely switching on a printing press. Yet to make more euros, you simply have to convince Germany to let Europe throw the switch on the money making machine.

In the pre-euro system the mess Europe is in would not have happened. Each country would have merrily devalued its currency to increase competitiveness whilst promoting inflation to eat up the debt pile.

This is what the UK has been doing and this is why it keeps its AAA credit rating. The UK can’t default. It only has to let the ink dry on new money to avoid that risk. The ‘thought crime’ of monetisation – buying your bonds back from their owners with new freshly minted money – is the very ability that keeps the UK clear of the dire straits of Italy, Spain, Ireland, Greece etc.

The solution to the crisis is to get Germany on board the inflation bandwagon and, in spite of whatever is being said in public, this is the deal that has been done. This is why the euro has suddenly weakened; it has gone from a gold standard to a soft currency, one where Germany will let the presses roll.

If this happens then the euro crisis’ potential to be an EU- and euro-destroying mechanism is over.

Instead, the euro will continue to weaken as it goes the way of the dollar and pound; inflation will bubble up. The banks have already been bailed by the European Central Bank. In turn, this will enable the banks to bail out the very same system that has bailed them out. The merry-go-round will continue to spin, however giddily.

The expected ‘Lehman’ event predicted by the doomsayers won’t happen. Budget cuts and inflation will.

People will get significantly poorer but in nominal terms. Their pay and assets will not appear to fall in numeric terms as inflation pushes up the value of all the things they need to buy, whilst pegging income and the value of assets to a never-rising floor.

One of the consequence of there being no ‘quick fixes’ to the current economic mess is the ignition of debate about ‘the failure of capitalism’. On the surface, this is an interesting debate, but capitalism is a system where capital is rewarded for its application, be it in industry or in a bank deposit account.

The debate raises three questions – firstly, is capitalism alive? Secondly, if alive, where is it? Finally, can a system be capitalist if the state takes the majority of GDP?

With so much GDP being sucked into the public sector there will be little growth. It is a recipe for long-term pain. There will be no change in policy, just a slow painful attempt to keep economies afloat and little change in a chronic cycle of retraction.

With zero interest rates, capital enjoys no such reward. We are left wondering: is this recession/depression a failure of capitalism or merely an indicator that capitalism is long since dead?

Where are the capitalists? Where are the builders of steel mills, the mines, the smoking factories? Who are the Plutocrats? There aren’t that many to be seen in the West; you have to go to the BRIC countries to find them.

In the developed world, governments spend much more on behalf of an average working family than that family earns; in many countries as much as twice the take home pay of an average family – after they pay their taxes. To make this more startling, there are many in Western societies who are not employed at all.

If you subtract state spending from total GDP, then subtract the tax take from what’s left and then deduct government borrowings, what remains in most developed countries approaches . . . zero. There is little or no GDP left for the private sector. No wonder there isn’t any economic growth.

Can an economy that spends more on the individual than they earn, which takes almost all GDP for its purposes, really be considered a capitalist system at all?

It is unsurprising new capitalist countries of the developing world are catching up fast. Even against a background of a depressed global economy are we about to witness a ‘triumph of capitalism’? The real capitalists of the developing world grow to surpass the socialised economies of the waning first world.

Until something is left for the private sector to reinvest, there will be no meaningful recovery in the West.

If austerity means shrinkage of the public sector to a sustainable balance, with the wealth-creating private sector, then there is hope. However, if austerity means simply holding wage levels of the public sector down while public sector debt is diluted by inflation (as savers and the private sector are pillaged) then the doomsayers will be proved correct.

What happens after the elections in Europe and the US will set the trajectory of the next decade, be it an era of recession or an economic re-birth. Whatever the road, there will be inflation.

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

SAMPLE CHAPTER:

MARKETS START TO RECOVER – BUT IS THERE TROUBLE AHEAD?

There are conflicting signals in the market.

The stock market slump of 2011 was meant to have been caused by European economic uncertainty and the possibility of the eurozone’s violent implosion.

The euro crisis still seems far from being resolved. However, the markets – at least outside of the ‘euro core’ – have recovered much of the lost ground.

Does this mean the euro crisis is over, or does this mean the fall was not about the euro crisis at all?

I think it’s likely the worst of the euro crisis is over. Yet it remains hard to believe (even as a controversial optimist) that a fail-proof solution is secured. It seems that an unconsummated deal is done, yet there is plenty of room for trouble ahead.

The US and British stock markets seems to suggest otherwise – you’d think looking at the recovery of the DOW and FTSE that everything has got back to normal.

A few short weeks ago the markets looked on the brink of meltdown. You’d have been forgiven for thinking that the world had recovered from the accident of Euro vulnerability and was almost on the point of convalescence.

To get to the bottom of these conflicting signals it is necessary to ask some fundamental questions:

1) What exactly is going on?

First, the US economy at last looks like it has passed its low point. Unemployment is falling and the housing market seems set for bottoming out. The Fed has promised no interest rate rises for the foreseeable future.

Second, an American recovery will see a global recovery – even if the developing world has a rough time for a year or two. While many worry about a Greek default, it is worth recalling that the economies of the PIIGS countries of Europe are equivalent to little more than economy of small US states.

2) Have Europe’s problems been blown out of proportion?

It could be that we have just enjoyed a ‘suckers rally’ – a reaction against the slump of the summer. Anyone who believes the market is pretty good at pricing assets will know that a strong rally is not created from stupidity, it is a result of millions of separate, carefully calculated transactions. The market being this wrong is highly unlikely.

3) Is 2012 set to be a bull market and will stock markets climb up the ‘wall of worry’?

Something to recall is that stock markets are very resilient. Companies are numerous and robust; while a few might fall into bankruptcy most manage to muddle through the toughest scenarios. Companies even survive World Wars, with the biggest surviving their nation’s defeat.

Accordingly, companies fair reasonably well in bad times in comparison to many other institutions – toughened by constant, hard competition they are a good bet in tough times.

4) If 2012 is going to be a strong year, how will it pan out?

The last two years have been harshly locked into the ‘Sell in May and Go Away’ period.

If anything, this is linked to a global rebalancing period when large capital balances are moved and hedged. This readjustment creates volatility and hurts prices. We will be fortunate if there isn’t another correction in this period.

After any such correction there will be a rally and this will play to an Obama re-election market surge in the late summer and early autumn.

January markets have already predicted Obama’s re-election, and none of the Republican contenders make that seem unlikely. As such, the next market strength comes in the run up to the poll. Market down – Republicans can hope for an Obama defeat. Market up – Obama wins.

In these market times, politics constantly trump economics. Unless you see a Republican as the next president we should get a strong stock market leading up to a late spring/early summer correction, followed by a recovery up to the year end.

There are plenty of things to tip this house of cards onto the floor – Iran, Europe or another debt skeleton could come tipping out of the closet; there is always a decent excuse waiting in the wings for a failed politician to blame.

Crucially, it is time to be a little less pessimistic. Recovery will come and perhaps it has already begun for the world’s economic superpower.

THE DEATH OF WEALTH

The Economic Fall of the West

Electronic Press Kit

Press Department
ADVFN Books
3rd Floor, 26 Throgmorton Street,
London EC2N 2AN

Email: bookspress@advfn.com

Phone: +44 (0) 207 070 0932

ADVFN Books website: http://www.advfnbooks.com

Contact us and ask for a review copy of The Death of Wealth