by Bill Bonner & Addison Wiggin
Empire of Debt (The Rise of an Epic Financial Crisis) is a thought-provoking look at the US financial “Empire” from an investment perspective. It makes for compulsive reading and grabs attention through the use of many stunning financial facts about the US Empire. For example Bonner and Wiggin believe that China owns 25% of the US Empire’s debt.
Did Bonner & Wiggin predict the US financial sub-prime crisis?
Bonner and Wiggin have made some insightful financial comments about the situation of the US “Empire” debt situation and some amazing predictions about the US housing bubble. We therefore raise the question, did Bonner & Addison predict the US financial sub-prime crisis?.
Themes from “Empire of Debt”
Empire of Debt covers the following themes:
- The US Empire like all Empires will eventually decline (e.g. Roman Empire, British Empire)
- The US financial Empire is dependent on the Chinese financial Empire
- The US financial Empire has been massively affected by dropping the gold standard
- The US financial debt Empire will burst at some point (was this the sub-prime forecast?)
Each of these is covered below.
The US Financial Empire Like all Empires Will Eventually Decline
The US Financial Empire needs to be set in an historical context. It is worth noting that there have been many financial Empires throughout history (such as the Roman Empire and the British Empire), both of which have eventually declined.
The US Financial Empire is Dependent on the Chinese Financial Empire
Bonner and Wiggin provide some startling facts about the deep financial dependency between China and the US financial empire. Basically the explanation is that the US financial Empire buy products from China with dollars, China then lends the dollars back to the US financial Empire. Alternatively China sometimes chooses to invest the dollars back into the US financial Empire.
The US Financial Empire Has Been Massively Affected by Dropping the Gold Standard
The value of the dollar fluctuated wildly after the gold standard was dropped. European currencies followed a similar financial path after the gold standard was dropped in Europe. Bonner & Wiggin help explain the impact of this.
The US Financial debt Empire Will Burst at Some Poin
Sadly the bursting of the US financial debt bubble appears to have burst as predicted by Bonner and Wiggin. The effects of the sub-prime financial bubble bursting in the US financial Empire has had significant ramnifications throughout this now interconnected global market. Looking forward Bonner & Wiggin also explain the “essentialist” philosophy, which appears to be a “back to basics” approach to financial spending and investment.
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