The Agile Investor

While the inflation age did not come, as of today, as predicted by the authors, the book did correctly predict somethings that happened in the last decade: oil price went even higher than their $50 target, commodity prices increased a lot, gold price has doubled close to $650 per ounce, real estate prices shot up in most areas, although the CPI has stayed lower than the interest rate, and both at low level. International funds returned better than in US, partly with the help of depreciating US dollars. Stock market did get big crashes two times around 9.11 and in end of this Febuary. Housing foreclosure is hitting some financial institutions. Some investing strategies proposed by the authors have remained true and useful based on high inflation, only that their precondition was not met, which is a happy thing to most people, and the credit of which I think should be given to the market oriented monetary policies of the more experienced Federal Reserve. However, by reading this book, not only can we learn a different thinking, we can also become more alarting and prepared just in case a new inflatinary time comes ahead. The book also provided some valuable financial data, though which seem obsolete at today's date.

[** "Sometime in the next ten years (the book was published in 1997 so call it 2 years), inflation will crest at over 20 percent. Mortgage interest rates will hit the high teens. A gallon of low-grade gasoline will sell for $5. The value of an ounce of gold will reach $1,000 and the price of a single family home will double." These dire predictions begin this fascinating book, which is rather unfortunate, as the inflation rate is still around 3.5%, the mortgage interest rate is around that, the price of gasoline is about $2.20 per gallon, gold is stable at $412 an ounce, and while the prices of houses have gone up, they are not even close to doubling. Such is the danger of putting predictions on the first page of your book. **] The authors of this book see a coming time when the electorate in many countries, including the U.S., will pressure their governments to artificially stimulate economic growth, which will result in the kind of inflation that was experienced in the 1970s. The reason that people will demand economic growth is that they see that their incomes have actually declined in buying power, resulting in a decline in standard of living. You see, when the world was in the industrial era, rises in productivity resulted in increases in production, and rises in wages. In the new service era, rises in productivity have resulted in decreases in the need for workers, which decreases the cost of the services and depresses the wages for the workers overall. To make matters worse, the new service economy requires educated employees, at the same time that the American education system is costing more, and producing poorer educated graduates. (This caused by the fact that falling wages for teachers means that schools are now filled with unqualified educators.) And now that Third World countries are trying to industrialize, the late 1990s should see a skyrocketing of commodity prices. Also, the American economy is awash in paper money, which is a definite inflationary pressure. After this hard hitting, and frankly dire, analysis, the authors launch into Part II of the book, which gives advice on what you should do to not just survive the coming inflation, but to actually prosper. OK, as the paragraphs above should make clear, the authors of this book take an alarmist view of current and future trends, resulting in some embarrassment. However, that said, I did find their analysis of the current situation in the American economy to be sound. I merely think that to sell this book, they painted the picture much more darkly than was prudent. Overall, I did find this to be a thought provoking highly informative read. Obviously, the inflationary explosion that the authors foresaw for the late 1990s did not occur, but the inflationary pressures are there. (Due to increasing demand in China and other parts of the world, the price of crude oil has been on the increase, and is unlike to make any significant falls.) So, this is a good book for every inves

Leeb and Conrad were a couple years ahead of their time with respect to their predictions of massive economic change. As a reader of Dr. Leeb's newsletters, I have followed his advice for quite some time, and I believe the time is nigh for their astute analysis of world economic trends. Investors small and large should have this book on their reading list. Today's policy-makers are facing the choices that are described in the book -- between rapid economic growth with accompanying inflation, or the other, less likely, but devastating worldwide deflation and depression. Either way, the long bull market is over, and the book shows investors the way to profit from either eventuality.

When I first read The Agile Investor over a year ago, I found its forecast of a long-term acceleration in inflation to be well-reasoned. But it seemed implausible in the context of the "goldilocks" economy and rip-roaring stock market of that time. About a month ago, I picked up the book again and found to my surprise it had largely forecasted the deflationary catastrophe that's now threatening the world. Suddenly, its basic contention that the world must choose now between higher inflation and a devastating new Great Depression is being debated in the highest levels of government, with inflation being by far the likely winner. I strongly recommend this book to anyone who wants a greater understanding of where the world economy is heading, which I believe is critical for building a profitable long-term investment strategy.

About two years ago I read Agile Investor, by Stephen Leeb and Roger Conrad. The book makes a strong - and indeed at the time I thought compelling - case for inflation or at least the end of a world in which growth and no inflation exist together. The last two years seemed to have proved the book wrong as inflation remained very low. However, the events of the past several months have made Leeb and Conrad seem like prophets. As I understand the key forecast in the book was that we would reach a point where policy makers would have to choose between inflation and deflation and inflation would win out. The consequences of inflation are spelled out in exquisite detail as are the much more unfortunate consequences of deflation. This book is must reading for anyone with any interest at all in today's financial markets.