Selling Gloom and Doom

While world financial markets reacted nervously to the outbreak of war between Iran and Iraq last week, a new book that promised to be a survival manual for economic disaster was riding atop the bestseller lists. Its title: Crisis Investing: Opportunities and Profits in the Coming Great Depression (Stratford Press; $12.50). The book has already sold approximately 150,000 copies and turned its author, Douglas R. Casey, 34, into the newest high priest of financial gloom and doom.

The message of Crisis Investing is simple. A depression of unprecedented magnitude will hit the world by 1983 because of excessive controls and distortions in the economy created by the U.S. Government. Says Casey: "This depression is going to make the 1930s look like a technical correction. This one is going to be a real doozy."

Casey's investment advice consists of some old bromides with a few new twists. In last year's bestselling How to Prosper During the Coming Bad Years, Howard J. Ruff suggested that squirreling away,dehydrated food and storing gallons of water represented about the best investment people could make. Casey, a gold bug, advises selling everything at hand and putting up to half the proceeds into "a well-hidden hoard." He likes bullion the best, but he also favors some gold mine stocks and South African Krugerrands. He confidently predicts that gold will eventually hit at least $1,600 per oz., but fails to say when. That kind of open-ended prognostication is all but worthless.

Casey also believes that the stocks of small natural-resource companies are good for short-term speculation. He has a dim view of the current craze for buying such collectibles as artworks or beer cans. But he makes two exceptions: custom-made knives and antique Greek, Roman and medieval coins. Casey happens to collect both of these himself. He inveighs against investing in U.S. real estate, arguing that the market has already peaked. He advises people to rent, rather than buy, housing. One of Casey's most urgent suggestions: get your money out of the U.S. and into a foreign bank. The book even provides names and addresses of the Swiss banks he favors.

Douglas Casey is a self-described millionaire who claims RALPH MORSE he made his money by investing primarily in gold, oil and natural-resources stocks. He has also worked in Washington as an independent insurance agent and a stockbroker. He says the inspiration for the book came from "those nincompoops who masquerade as economists and obfuscate economics by making it unintelligible."

Though the analysis and advice in Crisis Investing is often silly and sophomoric, its promotion has been shrewd. With an advertising budget of more than $600,000, the book has been ballyhooed in a barrage of full-page newspaper ads, some of which proclaim in big headlines: "Why You Will Probably Lose Everything in the Coming Depression." Casey is embarking on a lecture tour and starting a $ 145-a-year investment newsletter based on the book. On the way to the economic apocalypse, he will most likely make a bundle.

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