[Review] Full Faith and Credit

Full Faith & Credit: A Novel About Financial Collapse
by James R. Cook
Hardcover: 304 pages
Publisher: Blue Book Pubns; (March 1, 2000)
ISBN: 1886768498

Summary: Richie Stenquist, a commodities trader, thinks he knows something the rest of the world doesn't know - yet. As stocks collapse, government debts become dangerous time bombs, and the mother of all bears stalks the world's financial markets, he risks everything on the ultimate pyramid scheme.

Reviews:

Short Review: I enjoyed the book tremendously. You don't have to know much about financial markets to read it: in fact, the book is in some ways a primer on modern finanace disguised as a novel. For those who want to learn about the way that various financial and government entities interact, it's a marvelous book. But you do have to be *interested* in basic economics, because most of the book's plot turns on it. The characters, while a little thin, are enjoyable, and the plot twists are entertainingly sudden. I recommend it.

Long Review, with Spoilers: Richie Stenquist is an independent commodities broker on the verge of bankruptcy. (That's pretty much redundant, really.) But he thinks he sees the world's governments and basic economies overextended - and that means one thing.

The price of gold must rise.

After an initial lucky score on a yen futures exchange, he starts to buy gold futures. Not gold itself - options to buy gold at a fixed price in the future. As the price of gold rises, these become more valuable, and he uses the increased value to "pyramid" his purchases. Meanwhile, governments begin having problems meeting debt payments. The Fed begins monetizing the U.S. national debt. Runaway inflation and termination of welfare programs leads to massive civil disorder.

Most of the book involves following Richie and his family as they learn that it is never safe to be comfortable in uncomfortable times, with vignettes which take place everywhere from a New Orleans welfare office to meetings of the President and his economic advisors. The gist: once the slide starts, nothing can stop it.

There is no survivalism per se in the book, although at one point Richie does arm himself against those who might try to rob or hurt his family, and this is shown as a prudent thing to do. This book is about *financial* preparedness. Those who thought ahead, or who have hard assets which can be liquidated, are much better off than those who did not. Richie also wisely diversifies his enormous and growing wealth among different assets in different locations - perhaps his own problem, how to allocate billions of dollars in an economic collapse, may not arise for most readers, but his approach is instructive. While things do not decay to "Road Warrior" conditions, a full-blown Depression that makes the '29 crash look like a mild downturn is shown as inevitable.

"Full Faith and Credit" was published at the height of the dot-com boom: it is beginning to look rather prophetic. While the novel takes place over the course of a year or two, the author notes at the end that "such a collapse would probably take several years." We may be looking at it now. If so, reading this book can give you a good idea of what to expect in years to come.

St. Marc