Financial guru says country is feeling a ‘fiscal hangover’

By Ed Johnson

The Beaverton Valley Times, Jan 7, 2010

Keith Fitz-Gerald

submitted

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You might be surprised to learn that Beaverton is home to a world-famous financial expert.

Keith Fitz-Gerald runs the Money Morning investment newsletter, which has more than 500,000 subscribers, and is the author of the newly released book “Fiscal Hangover.” The book’s goal, Fitz-Gerald says, is to give investment advice to average people on how they can best profit from the radical changes in the market over the last two years. He started writing the book at the beginning of 2009, and spent months perfecting it.

The Beaverton Valley Times caught Fitz-Gerald by phone while he was in Baltimore this week – he tends to travel a lot, and splits his time between living in Oregon and Japan with his wife and two sons – and asked him about the process of writing the book and what advice he has for new investors.

He says if you see him at the gym, go ahead and ask him about investment. Fitz-Gerald seems to like answering questions.

How did you get into the book? What’s your history with the subject matter?

Well, I’ve been in the professional trading and investment environment for 20 years. Presently, I serve as the chief investment strategist for Money Map Press. In my capacity as the chief investment strategist, it occurred to me that nobody talks about what actually happened. Wall Street wasn’t talking to people the way they should talk to people, and people didn’t have access in a compelling fashion that told us “why did we get here?” and more importantly, “what can we do about it?”

So, the vision to me was very clear: To speak clearly, concisely, and in a down-to-earth fashion. Because let’s face it, most financial books in my opinion are like going to the dentist and getting your teeth drilled. And they’re about that interesting too. This is not that style of book. This is very much designed for the everyday individual.

What do you hope people will get out of the book?

I want them to understand two things. I want them to understand that, yes, this is a very serious financial crisis, and we can’t treat it lightly. But I don’t really tell people that, because there’s a lot of people that have already heard it. But what people don’t realize is that we’ve been in similar situations before as a society. It’s just beyond our living memory. For example, the financial crisis of 1874, the banking crisis of 1904, the Great Depression, which is beyond the memory of all but a very few people. So there’s no living memory here.

The other thing I want people to understand is that every time mankind endures some kind of calamity like this, there is tremendous wealth created on the opposite side. So if anything, the fact that this is such a serious crisis, should be, despite the fact that it feels bad, actually a sign that there is great wealth ahead.

And I lay out a very clear path to that, which is investing more heavily in global stocks than you have ever done before. And the reason for that is very simple: 75 percent of the global economic activity now takes place outside of the U.S.

Where does the term “fiscal hangover” come from?

Well, that, basically, we’ve seen the doubling of a national debt, and a five-fold increase in the lending capacity. It’s like a hangover. We engaged in excessive behavior, and the next day you’re going to pay for it.

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