The Crystal Ball of James Dale Davidson
Today I was rummaging through some boxes around the house and came across a booklet I had received in the mail years ago ominously titled "The Plague of the Black Debt: How to Survive the Coming Depression" by a James Dale Davidson. The booklet describes Davidson as "a principal in Strategic Advisors Corporation, an asset management group for wealthy individuals" and touts his ability to predict events.
Davidson co-authored several books with a Lord William Rees-Mogg (he being a member of the British House of Lords), including The Sovereign Individual. I tried to find out more information about Davidson on the Internet. There does not seem to be much information about him. Apparently he founded the National Taxpayers Union.
Anyway, "The Plague of the Black Debt" has a copyright date of 1993, so I received it either that year or in 1994 at the latest. In the booklet, Davidson makes a number of ominous predictions, some that in hindsight were laughably wrong. In fact, I believe I held on to the booklet just so I could check the accuracy of its predictions years later.
My favorite is on page 58, where Davidson confidently claims that "Bill Clinton is going to be a one-term president. He is going to get clobbered in the '96 election, assuming his own party even renominates him. I am as sure of this as I am that the sun will rise tomorrow." (Emphasis mine). Granted, Clinton did suffer a major setback in the '94 congressional election, with the Republicans taking control of both houses of Congress. But Clinton handily defeated a lackluster Bob Dole in the 1996 election.
Davidson continues, "Bill Clinton's failure will take place against a background of deep depression, urban riots, and people losing their homes." None of these things happened on Clinton's watch, though many people are losing their homes under the current administration.
Another amusing little nugget, "[S]ome events I expect in the next few months: Boris Yeltsin will lose his job. Russia will come under the control of a nationalist, militarist regime - in effect, a fascist regime." In actual fact, Boris Yeltsin would be re-elected to a second term in 1996 and he would later voluntarily step down at the end of 1999.
Davidson also makes dire prognostications about how the national debt would increase by a trillion dollars during Clinton's "one-term" presidency. But as we all know, budget deficits turned into budget surpluses during Clinton's second term, and there were even perfunctory efforts to pay down the national debt.
There are a number of other "predictions" that Davidson makes about what Clinton would do that never happened in either of his two terms as president. And of course, all of these alarmist claims were pitched to gullible investors to get them to subscribe to Davidson's monthly STRATEGIC INVESTMENT newsletter.
Now to be fair, not all of Davidson's predictions or analyses in the booklet were wrong. One specter he raises in the booklet as happening "in just a few years from now" is of "millions of homeowners 'upside down' - with the mortgage bigger than the market value of the home. A lot of them will hand the key to the lender and walk away. There will be a lot of empty houses with 'For Sale' signs." And in fact, in recent months, this has indeed been happening. There are even companies now set up to help homeowners to indeed walk away from their houses.
But Davidson made so many specific predictions that were incredibly wrong that it makes me wonder if any investors got hosed in the Nineties following his advice. It just goes to show that a healthy skepticism applies to more than just the claims of religion and the supernatural.
posted by Tommykey @ 9:50 PM
33 comments
33 Comments:
I wouldn't worry too much about the investors. Betting on a bear market and losing is a whole lot less painful than betting on a bull market and losing.
That's because investors usually react to a perceived bear market by hedging and by pulling their money out of higher risk investments. During good times, they don't make as much money as the bulls do, but they do OK.
But there are a few who are silly enough to sell short. Unless you really know what you're doing, that's a great way to lose a ton of money in a hurry.
I'd like to hear your comments on JDD now. I read that same little booklet years ago, and dug it up last week because of what is going on, and it seems very close to today. Russia too, (not just the economy). I'm not happy about it, but seems he and Moggs were right.
I have to agree with anonymous. Although a bit later than he predicted a good portion of the points he makes in that booklet are happening right now. Greenspan has already been accused of creating an economy that fosters a depression by many financial analysts.
I have to correct you on one point. Clinton did NOT decrease the federal debt. He decreased the federal deficit or in other words the amount they bounced the check. Two very different terms.
Until we pay down our debt, decrease our foreign trade deficit and get back to some type of backed currency we're still on track to fulfill James' predictions.
So far as I can tell the public doesn't want to elect anyone that wants to do any of the above.
Has either candidate even mentioned the federal debt?
Clinton veto'ed the balanced budget amendment which would have caused congress to actually have to not spend any more than they had collected in taxes, novel idea.
I read this booklet back in 2001 and just dug it up again and re skimmed it. I did find some ideas to be predicted but not so much the timeline. Mostly it does bring to question as to what the hell is exactly going on? I say all the same rules apply today as in the past both the government and people need to live in there means, save, own your home outright, and not be so greedy and wanting. Simple.
Have just pulled out an old copy of "Plague of the Black Debt" and it seems to me that Davidson and Rees-Mogg got it a lot more right than wrong - and it's still unfolding. I am pretty sure the "cannon fodder", i.e. the ordinary man-in-the-street, all over the world , is going to suffer long and hard whilst those in the know, call them the "Illuminati" if you will, make shitloads of money - on the way down and then on the way up again.
I too picked up a copy of "The Plague of the Black Debt". But the year was 2004 and it was already a dated book at that time. I was intrigued by the accuracy of some of the predictions for the 90's, particularly the one about ski resort real estate going up- I had watched this happen in my home ski town. I had a strong, erie feeling so I also held onto the book to see if the bubble was going to bust and the rest of his predictions would also come true.
I pulled out that book last week and it seems he and Rees-Mogg weren't so far off by their predictions of events, but timing. Perhaps its because the "depression cycle" he speaks of is between 50 and 70 years so he felt it would be in the middle at sixty years (or mid to late 90's).
I just found this book among my deceased mother's books and read it this evening. Page 109 gave me the shivers:
At the beginning of the 20's real estate lenders demanded 40% down, by the end of the 20"s, hugh loans were made, nothing down, on a hole in the ground. Second and third mortgages, backed by nothing, were sold to individual investors for twice the interest you could earn on a T-Bill. People were told these were perfectly safe, that there had never been a default.
Sound familiar?
Wow, this thread sure picked up some steam lately.
Interesting...I was rumaging the back bed room and found this book that I received with a subscription to some conservative organization..I concur that the last few months show that his book to be largely true..then again..we all know that our finiancial system is a house of cards.. that government spending is out of control and has been for decades.. The last straw is credit card debt...any one notice that those boys have applied for or have been granted bank status?? :-)
Dead on book...just missed the timing... Herb
Crystal ball ... yes! Well, maybe...
Strange, so very strange. I'm searching the web on J.D.D. because I just read this same book. I went on vacation and scanned my bookshelf for some quick to read books on investing. Guess I got it like anyone else - in the mail long ago. True, some of the predictions are incorrect - but I'd say, for a book that was written in '93-'94, this is creepy it's so close to today's reality. It's also creepy that you folks have recently commented on this 15 year old political/ financial/ promotional prophecy. I thought I was alone on this coincidence. His predicted timing basically did happen at the internet tech bubble burst around 2000. Now 15 years later, his ultimate financial prediction is basically upon us - who can say for sure? Maybe this will be a depression. So here I am searching to see if JDD and the SI newsletter was or is too good to be true. I similarly found some accusations on the web that JDD is a penny stock fraudster - but it's written by media and who knows if it's actually true or not. Anyway, it looks like strategic investment as a newsletter still exists www.strategicinvestment.com but of course all the names have changed - no more JDD. So was it a mail order scam? Was it legit but called a scam? Is the new Agora and SI newsletter a valuable resource? I'm looking for what JDD promised SI would be - the best investment advice available. Isn't everyone? baldwad at gmail
It may or may not be fair to credit JDD with predictions that took over a decade to happen. Wait long enough, and some serious crisis will eventually happen. He himself admitted in one of his last contributions to Strategic Investment that his prediction of another great depression for the 1990s was wrong. He has since strangely disappeared from public view, allegedly due to a stroke, or some other circulatory illness.
I also found their predictions to be pretty accurate, although the timing is way off in some cases, and as the original post say, they missed some entirely. I am reading their book The Sovereign Individual right now, and it is stunning how on the money some of these predictions were - collapse of governments around the world, central banks lose the power to inflate and control the money supply, widespread loss in confidence in political leaders. It seems that each new idea I read corresponds with a current headline to some degree. For another useful, predictive book, take a look at Harry Dent's new book about the coming Great Depression. It just came out this month. Also, I found recent posts by Rees-Mogg on www.newsmax.com, but nothing from Davidson.
I too was cleaning the basement last night and came across Plague of the Black Debt. I read this just for fun to see how close it would come to todays events. Scary Close!Islamic terrorist, housing and banking crisis, high unemployment,third world countries with nukes and our goverment pumping money into a failed system. pg113 "get out of debt&stocks". My thoughts exactly.
Personally, I'm a fan. He's not in the public eye at this time intentionally. After all, he was prepared.
A freind mentioned that she had read JDD's book "The Great Reckoning" some years back and was now seeing the predicitons come to pass. I am reading it now and, like the book you are referring to, there are many predictions discussed that he predicted would occur in the '90's but are just now coming about. On such a long cycle, it would not be unusual to be off a few years. I'm sure that our Fed and Treasury have been pulling every rabbit out of the hat trying to keep things propped up as long as possible. Personally, I think the advent of the internet caused a huge amount of dusty money to be put to productive use and forestalled the downturn (lucky for Bill that his VP invented it).
I feel like we are in a very unfamiliar, Salvadore Dali financial/political landscape and I am searching for where we are possibly going in the future. Since JDD seems more right than wrong, a major accomplishment, I would tend to at least listen to what he has to say. As a friend of mine used to say, "Listen to everyone, but think for yourself."
Where is JDD today? I don't know, but back in 1992 I read "The Great Reckoning" by JDD and Lord Rees-Moog. I remembr the book predicting almost excatly what we are seeing today, just delayed 15 years. The book even predicted what would cause its predictions to be delayed by 10 to 20 years. That is, some new un-forseen invention that would delay the depression. The invention turned out to be the Internet. I am going to find a copy of that book and re-read it. Besdies the predictions, the book is very interesting reading.
Best Regards,
bryan@delaneymail.com
One thing JDD addressed 15 years ago was the decline in large militaries and weapons systems and the rise in terrorism and home-made bombs and weapons that would be accessible by any fruitcake who held a grudge. He advised investing in anti-terrorist technologies long before anyone had heard of Al Quaeda.
He advised investing in anti-terrorist technologies long before anyone had heard of Al Quaeda.
Maybe it was JDD who was really behind the attack on the WTC! LOL!
i was at a yard sale this past summer and got this book for a dime, and t was lost in the closet. found it today and read it. all makes sense...people need to look into something called "AUSTRIAN ECONMICS & THE SCHOOL OF VON MISES" ron paul is an advocate, but people always thought he was crazy. Also look on youtube for a video title "PETER SCHIFF PREDICTS ECONOMIC COLLAPSE 8/28/06" he was labled crazy also. please people, at least check out and decide for yourself!
So -- some of the predictions have come to pass and more may as well. The only question that counts -- how do we profit from it???
I just came across this book last week and wondered how I aquired it. Now I know it was junk mail. I read it for the first time because of the "times". I wondered about all the coincidences I found on this blog but then I realized there was a mass mailing here and there are millions of pack rats like us who never throw a book out and who are curious enough to google the writer's name. It was interesting to read. Depression or no I agree the partie's over and we all need to get out of debt and live more simply. Thank God the best things in life ARE free!
bmnbbb
I think you all should rummage some more and find the booklet entitled THE DISAPPEARANcE OF INTEGRITY and the Financial Destruction of America's Middle class. Published by JDD in 1996. This book couldn't be more on the "money" today!
JDD writes a letter called Abundance; to me {at least), it sounds pretty insightful. I also read The Plague of... and I thought he provided some decent points to consider. Jrad
JDD writes a blog called Abundance; I am impressed with the tone of the letter, to me he sounds pretty insightful.
If you're a subscriber to the free newsletter from The Sovereign Society, then you'll have received a little note from JDD, with links to a website at which he offers a special deal (ahem) on his Crisis Newsletter service. He describes himself as a crisis investor, and is touting a currency transaction he'll help you with through the newsletter service -- a transaction that could (he says) result in an extraordinary return on investment with minimal risk. He quotes from his earlier works, but does not mention the Agora debacle (perhaps because he was not charged). He does comment on his great record as a prognosticator. I like his basic idea in this case; I'm just not sure it's worth $495 for a subscription to his service, which (he claims) is how he makes his money -- solely by selling advice. He wants us to assume that he's making tons of money selling the service because his advice works. I'd love to talk to actual subscribers, but somehow I don't think I'd be given the opportunity to do so.
Very strange. Late last summer I came across this book and put it up. With all the dire financial news lately, I picked it up again. It seems spot on, if not a little late. Because it was published in 1993, I'd buy that the internet pushed the timing back. Maybe that is what Gore was referring to when he claimed he "invented" it. Perhaps he meant he was responsible for unleashing it. Something to ponder.
Hey!
At least he predicted the fall of the Berlin Wall!... like everybody else.
Anonymous @ March 15, Al Gore never claimed to have invented the Internet. He was instrumental in getting the legislation passed in Congress that made the Internet available for public use.
It's interesting that Davidson has the intellectual skills to see things coming. Some of his predictions were made with information from Washington insiders, such as terrorism being the next world threat. This latter issue was known well in advance, because it was being planned by those at the top levels of power. That's merely insider scuttlebutt.
But oddly enough, although JDD, and friends, could see things coming, the news letters were always pushing some B.S. stocks, and at times they were even the market makers of those stocks. Yes, this is scam material. Little wonder Davidson ended up being charged with stock fraud.
Lord Rees-Mogg's rep is still in tact. He's writing and Lording still, as are other members of the news-letters-machine, of which Strategic Investments was one product.
I even have a memory of seeing JDD on Firing Line, with Bill Buckley, as one of the members of the conservatives panel in a debate. This happened a couple of times, if memory serves.
I read all of their books. Damn good reading. I used to have a lot of respect for Davidson, but in the end, he deserved to be charged, IMHO.
Re: Davidson charged
I posted, apparently in error, that JDD was charged with stock fraud. I just found a page stating that this was not the case. I thought I'd make this correction. See: http://en.wikipedia.org/wiki/James_Dale_Davidson
Exercise in Futility, today marks the one year anniversary of your original post. Last night I found The Plague of Black Debt while sorting through stuff I inherited from my late parents. I did a cursory read-through.
When JDD published this we were in a period of political uncertianty about Bill. In November of 2007, we started another, more convoluted period of political uncertianty (which we are still in until Barack's agenda shakes out). Uncertianty is what spooks the market more than anything else. It looks like some fundamental changes in our economic structure will come about. At best, I think the market will go sideways (be generally flat) for the next decade.
What's your take a year later?
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