Dave Forest’s “Crack-Up Boom” presentation has been doing the rounds lately, and I decided to look into his prediction to see what it was all about.
In short, Dave Forest’s prediction centers around increasing inflation in the U.S. and how he believes we are in the midst of a crack-up boom, which is essentially a rapid devaluation of the currency.
He also talked about the various stages of a crack-up boom, what he thinks will happen next, and recommended different strategies to protect and grow your wealth.
There was a lot of “doom and gloom” in the presentation, and in my opinion, some of it is fear-mongering used to pitch his Strategic Investor newsletter service.
However, he did make some interesting points about how inflation could play out and cause shortages of goods most of us take for granted.
In this post, I’ll summarize Dave Forest’s “crack-up boom” prediction, show you what he’s recommending, and share my thoughts on Strategic Investor.
Dave Forest’s “Crack-Up Boom” Prediction
The “crack-up boom” presentation is more or less an interview between host Fiona Forbes and investment guru Dave Forest on the Casey Research website.
Immediately before the “interview,” there was a short video of Dave Forest at a department store with empty shelves behind him talking about shortages, which he claims are about to get worse, and that “we’re on the verge of a huge crack-up.”
“Because soon – in the blink of an eye –
An invisible force could empty every last shelf in this store and thousands of stores like it across America…”
What “invisible force” is Dave Forest talking about?
In a word: inflation.
It’s no secret we’ve seen inflation go up in recent years and months, and this is something many people are concerned about. However, what Dave Forest is referring to isn’t just “regular” inflation like we’ve lived with for many years; it’s hyperinflation.
For whatever reason, he doesn’t specifically mention this term in the presentation, but this is absolutely what his prediction centers around.
In short, inflation is where money becomes less and less valuable with time, whereas hyperinflation is an acceleration of this and can see the currency devalue rapidly. To the point where virtually everything gets exponentially more expensive.
This has happened many times throughout history in countries like Zimbabwe, Argentina, and Germany, but it’s never happened in America.
Yet this is (more or less) what Dave Forest is suggesting could happen.
What is a crack-up boom? And how does it relate to inflation?
The central part of Dave Forest’s prediction is that we’re on the verge of a crack-up boom:
“We’re on the verge of a new crisis…
And unlike in 2008, the root of this crisis isn’t on Wall Street… and it’s not another Great Recession.
It’s called a Crack-Up-Boom.”
The term crack-up boom wasn’t something Dave Forest came up with. It was coined by an Austrian economist named Dr. Ludwig von Mises, and it refers to when significant credit expansion leads to rapid inflation, which leads to a collapse of the monetary system.
The article I just linked to is worth checking out if you want to learn more, but the gist is that in a crackup-boom, people lose faith in the local currency and turn to buying “stuff.” And this can lead to even higher prices and shortages of goods that are normally always available.
Another aspect of Dave Forest’s prediction is that, even though a crack-up boom isn’t good, it can “feel” good in the early stages as asset prices are going up.
Because, as he points out, stocks, cryptos, real estate, and other assets have been soaring, and stimulus checks have been doled out to help the economy.
“That’s exactly why a Crack-up Boom is so deadly…on the surface it FEELS great…
You might have seen a boost in Social Security payouts…
Or maybe your boss gave you a bigger raise than you were expecting.
Or your investments are way up from this point last year.”
However, while it might seem like this is increasing people’s wealth, the cost of everyday goods and services is rising too, which Dave Forest argues is leading to a shortage of “stuff.”
“It’s just more paper currency swishing around… chasing the same stuff that was there before.
And that’s a simple way to think about a Crack-Up Boom:
Too much money. Not enough stuff.”
What does Dave Forest predict will happen next?
According to Dave Forest, there are “three basic stages” of a crack-up boom.
He says the first stage is where all the new money circulating through the economy can make people feel “rich” for the reasons I just mentioned.
But before long, he explains that prices of everyday goods start to rise as more people realize that “stuff” is a better store of value than cash.
“As more and more people realize STUFF is a better store of value than MONEY – a strange thing starts to happen.
The price of popular items begins to soar…
And as more and more people begin to ‘catch on’ — these items disappear, entirely.
Sometimes they’re hoarded out of existence…
Other times, companies simply REFUSE to sell their products.”
Stage three, according to Dave Forest, is essentially when the currency becomes worthless as it has in many other countries over the years when people abandon currency for “stuff.”
Why does Dave Forest suggest we’re in the midst of a crack-up boom?
According to Dave Forest:
“The key reason all this is happening is… all that extra money is floating around.”
He more or less suggests that “money printing” is the culprit and states that “the more money the government prints,” “the higher prices go.”
The topic of “money printing” is more complex and nuanced than that; it’s not like the Fed or U.S. government is printing money and flooding the system with it. However, things like quantitative easing can increase inflation in a roundabout way.
For example, QE involves the central bank purchasing government bonds, which can lower interest rates and increase market speculation as investors seek higher yields. And this, in turn, can lead to asset price appreciation. QE can also lead to higher amounts of fiscal stimulus since it can make it cheaper for governments to borrow money.
In any case, regardless of the cause, the U.S. is seeing high inflation right now, so it’s not surprising that many people are concerned about it. Nor is it surprising to see gurus like Dave Forest discussing inflation and recommending ways to navigate it.
So, what “solution” does Dave Forest recommend?
Dave Forest has put together a series of research reports that explain his prediction in more detail and show you what his inflation-related recommendations are.
At the core of each report is the idea that he doesn’t believe cash is the ideal place to store your wealth. Specifically, he suggests holding no more than 10% of your net worth in cash.
“Well, the first step is mental. We all need to rethink our relationship to cash. Cash is no longer king. Cash is NOT your friend, and it’s NOT a safe place for your money.
At the moment, you still need cash to survive. But if you have any more than 10% of your total worth in cash, inflation is bleeding you out with every passing minute.”
The first report is called “27 Essential Items to Buy NOW — Here Today, Gone Tomorrow, Gone Forever.” And as the name suggests, this report covers 27 different items he recommends buying now before they go way in price or become unavailable.
He reveals some of these in the presentation. And surprisingly, one of his recommendations is to buy car tires as he believes these “could hit $1,200 per tire” in the future.
He also suggests buying lumber and iPhones (lol).
These suggestions sounded a bit odd to me at first, but he explains his reasoning in the presentation and he makes a compelling argument as to why these could be a better store of value than cash. And he expands on this in the report. The report also shows you what percentage he recommends each item (27 in total) should have in your portfolio.
The second report is called “The Crack-Up Boom Blueprint.” This is all about protecting and growing your wealth during inflation. It covers six assets he expects to rise and fall going forward, which stocks to sell, and three ways to generate income.
The third report is “The Ultimate Crack-Up Boom Portfolio.”
According to Dave Forest, he spent the last few months researching the best portfolio for the crack-up boom, and seven investments made his list. The first two picks involve American farmland, another two have to do with companies that own towers that power 5G networks, and from what I can gather, the last few relate to “hard investments.”
Lastly, he’s created a report called “How 1 ‘Boom Trade’ could Hand You 50 Times Your Money.” He doesn’t reveal what this pick is but says that the last time he recommended something like this to his readers, they had the chance to 50x their money.
What else does he recommend?
For the most part, Dave Forest’s recommendations are explained in the four reports I just mentioned, which come with a Strategic Investor subscription. But he did share some things to buy (which I mentioned earlier), and he suggests owning some bitcoin and gold.
“Some of your money should be in Bitcoin, some in the ‘inflation-proof’ stocks I’ll tell you about, and some in hard metals, like gold. “
In the next section, I’ll give you some insight into who Dave Forest is, then I’ll show you what his service, Strategic Investor, is about to help you decide if it’s worth it.
Who Is Dave Forest?
Dave Forest is a geologist-turned-stockpicker that runs several advisory services for Casey Research, a financial publishing company based in Florida.
According to his Casey Research profile, he worked in the mining and petroleum industry for 20 years before getting into financial education.
Now he runs his flagship Strategic Investor research service and two others: International Speculator and Strategic Trader.
Each service focuses on different investments and strategies, but Dave Forest’s specialty is in the natural resources sector, particularly as it relates to energy, precious metals, and mining.
He’s also an expert on warrant investing, which is similar to trading options, and he’s created a Warrants Master Course that I’ve written about on this blog.
Is he the real deal? I wouldn’t assume all of his picks will make you money since nobody can predict the future, but Dave Forest seems like a genuine expert. And Casey Research, the company behind the service, is reputable and has been around for many years.
Recommended: Go here to see my #1 rated stock advisory of 2022
What Is Strategic Investor?
Strategic Investor is a Casey Research advisory service run by Dave Forest that provides subscribers with commodities-related investment ideas.
According to Dave Forest, his strategy centers around finding investments in, as he puts it, “real stuff.” And he says he finds these investments by traveling and networking.
“And my focus is almost always on REAL stuff…
Not just on technology – but the building blocks most people never consider… from energy to rare earth minerals… to the supply chain.
My extensive travels are part of the fun for me, and after years of jet-setting, I’ve built a powerful network of investing experts.”
For the most part, Dave Forest’s research and investment ideas center around commodities and natural resources. But he also shares recommendations on warrants, tech-related plays, and anything related to the supply chain.
Each month, subscribers receive a new issue of Strategic Investor, which covers what investments he’s bullish on as well as his research and analysis.
The service also comes with the research reports I mentioned earlier that detail his inflation-related recommendations.
There’s more to it than that, but the gist is that the service gives you Dave Forest’s research and stock picks. If you want to know more, check out my complete Strategic Investor review because, in it, I go into more detail on what it’s about and how it works.
How much does it cost?
The Casey Research website states that the service retails for $199, but as is often the case, you can join for $49 through the presentation.
However, the service automatically renews at $129 after the first 12 months.
Is Strategic Investor Legit?
Nothing I’ve seen has suggested that Strategic Investor is a scam. As mentioned, Dave Forest is a real investment guru, and Casey Research is a legit company.
Not to mention, the service comes with a 60-day refund. So if you sign up and don’t like it, you can always contact the company and ask for your money back within that timeframe.
That said, I do feel that the marketing behind the “crack-up boom” presentation is a bit over the top. As in, the “doom and gloom” narrative is dialed up to epic proportions.
Don’t get me wrong, as bleak as it is, Dave Forest’s prediction could be right. He does make some interesting points in the presentation about how inflation could run higher. And he’s not the only investment expert talking about the potential for a crack-up boom.
But I suggest taking some of it with a pinch of salt because nobody knows how any of this is going to play out or when. It’s all speculation at the end of the day.
Either way, the service is legit. And you could find it worthwhile if you’re interested in learning how to invest in natural resources and hedge against inflation.
Dave Forest’s “crack-up boom” prediction centers around how inflation could lead to rapid price increases and widespread shortages of goods in America.
He talked about how inflation can “feel” good at first with rising asset prices and so forth, but how it can also spiral out of control as the money becomes less and less valuable.
He also talked about what you can do to protect and grow wealth should his prediction play out. And for the most part, his recommendation involves getting out of cash, buying a list of items he thinks could go higher in price, and investing in assets he’s bullish on.
In many ways, it reminded me of Dr. David Eifrig’s “financial lockdown” prediction, which I wrote about a while back. Although Dr. Eifrig focused more on the impact inflation could have on retirees and recommended a different strategy.
Anyway, that’s my take on all of this.
What do you think?
Will inflation continue soaring higher from here, to the point of a full-blown crack-up boom? Or have we seen the worst of it? Let me know in the comments section below.