What to do before then? Don't have any money in US stocks. Diversify both geographically and sector-wise, cash out, be ready to invest when stocks crash through the floor, to ride the wave when they inevitably rise again. The real trick is spotting who's going to rise again and who's going to be left behind. Tech stocks are volatile by nature, invest in renewable energy and related sectors. We're going to need solar and wind power in the future, and batteries. Lots of batteries. Then, as we near battery saturation, there is going to be big money in recycling all those depleted batteries.

What will be the catalyst? Just because we haven't had a recession in awhile is not enough. Corporate profits are up, consumer spending is up, and even though everyone on here thinks the numbers are lies, wages are starting to go up.

> My money is on late 2018 or early 2019.

So you have already either shorted the market or bought put options out in 2019?

I'm not a huge investor, but I am preparing by reducing the proportion of US stocks in my portfolio.

Have you really put your own money on that?

We're going to need solar and wind power in the future, and batteries. Lots of batteries.

Do you really think you have some big insight here that the rest of the investment community hasn't thought about?

It's unsustainable growth, and I'm afraid the crash is going to happen sooner rather than later.

Will it be as bad as in 2008? I don't know. But it's going to hurt (except if you're wealthy enough to invest heavily right after and ride the wave back up again).

QE was a reaction and counterpressure to low rates, not the cause.

Stuff we actually need like housing, healthcare (in the US), and education have been rising faster than 2%.

Assets too like stocks have risen much higher as well.

Isn't the problem in investing in that that there's really no way to know which particular business will come out on top here since there really isn't any large barriers of entry?

There's a lot of money in oil that will be captured by the 'free' energy of renewables. Renewables are just now becoming more cost effective than oil. Oil will be around for a long time but renewables are poised to overtake it in consumer and commercial energy. Might take a few decades but it's inevitable that a vastly more efficient energy source becomes the market leader.

Also, governments across the world are putting in place regulations to build and retrofit buildings to reduce emissions. That's not just energy, it's the actual building materials and techniques. That's a lot of government mandated money about to be put into green infrastructure. Again, this is over decades so the ramp time will seem slow to us humans but now is the time to get in IMO. However, I am an amateur investor and I've definitely been wrong before...

The least desired asset class right now is cash. Compare that to 2009-2011 or so & cash was the prized asset class which underperformed going forward. Aside from the least desired, the cheapest asset class in the world today is volatility.

Economists have predicted 15 of the last 10 crashes.

Just before a crash the best place to keep your money is in cash. Those who are liquid after a crash can clean up by investing at that time.

https://www.vanguard.ch/privateinvestors/indv/loadPDF?countr...

Safe places IMO are deflationary assets (gold, and to a much more risky extent, bitcoin...I know this will start a flame war lol). Another option is foreign assets in countries that are not holding onto a lot of US debt.

I'm not an oracle, so I can't predict timing, although I do think it will happen relatively soon in the next 1-3 years.

Instead of investing in gold, why not invest in a foreign market that's at least partially insulated from the US?

[1] http://www.minyanville.com/trading-and-investing/commodities...

I also suggested foreign assets that are not holding onto a lot of US debt.

All other industrial uses are completely swamped by the creation of human ornamentation. But the thing about jewelry is that the gold in it is usually very easily recycled. So it is not as strongly consumed as the gold used in electronics, which requires a greater effort to recover, if it isn't simply landfilled a milligram at a time.

That jewelry use creates a soft reserve, such that it is usually not available to the market, but if the gold price rises high enough, it can start to liquidate, likely starting with the ugliest necklaces.

So it would seem that the majority of the value of gold comes from the human desire to possess a tangible, portable symbol of one's wealth. It cannot be taken from you, unless someone finds you and pries it out of your fingers. Paper assets are more amenable to remote interference. Your ownership of a company via stocks may be diluted. Your fiat accounts may be devalued via monetary inflation or seized with the cooperation of your bank. Your bonds may suffer default. The title to your land may be transferred against your will. But that gold necklace is yours, as long as you're the only one that knows where it is.

As such, failing to invest in gold is ignoring the risk of a major crash in the modern centrally-banked, fractional-reserved, and fiat-moneyed economy, which is subject to boom-bust cycles. Gold is the asset of choice for those that think that government bonds from too-big-to-fail countries are not actually the default lowest-risk investment. But even then, the gold bugs are undercut by the people who buy condos in underground shelters that anticipate the complete collapse of human civilization, along with barrels filled with small arms ammunition. Buffett's #3, #5, and #6--gold is going long on fear--is definitely true.

But I don't think the other quotes are 100% accurate. They have the odor of the Labor Theory of Value about them. Things don't have value because they do stuff, but because people want them. Gold has value because some people want gold, not because it delivers billions of bottles of Coke, or ferries passengers across continents, or summons a driver for you on command. People want gold for different reasons, and some reasons are more predictable than others, but none of those reasons are required to be rational or useful. And that's why the Buffett analysis of gold fails, in my opinion.

The way I interpret Buffett's view on gold is that if I have a choice between buying a hunk of yellow metal that just sits there, or buying the same amount of shares of a (high quality) company like KO where people labor day and night trying to make more money for the shareholders, the choice is pretty obviously the latter. Of course, those people may be ineffective in their labors, or worse, stupid decisions by managers might make the company less valuable, but if I have some reasonable confidence in them, gold doesn't sound very attractive. In the case of KO, it has been steadily increasing dividends for something like 50 years, so something must be going right. That seems like pragmatism, to me, not Labor Theory of Value, though.

I don't believe it is applicable to most of the economies on this planet.

If I may analogize, Buffett is saying that a trophy spouse that does nothing but look good and impress your friends (gold) is a less worthwhile investment than one that goes away all day to bring home $80 and a distinct grease-trap odor (stocks). A Van Gogh painting that hangs on your wall, slowly oxidizing its pigments (gold) is a less worthy investment than a plastic fish on a wood-veneer plaque that can sing four different songs whenever you walk past it (stocks). A square mile out in the desert with awesome sunsets and no light pollution at night (gold) is better than a square mile that grows corn, wheat, alfalfa, and soy when dosed with sufficient amounts of chemicals (stocks).

People value things other than money and rate of return, and other purely rational criteria. Sometimes people buy things to enjoy them as they are, rather than anticipate what they could be. The lump of gold will never be anything greater or lesser than what it was when you bought it, and some people like that quality. The 1 troy ounce .9167 gold coin will always be worth at least 1 troy ounce of .9167 gold, no matter what anyone else in the world does. If you bury 10 kg of .9999 gold and dig it up 100 years later, it will still be worth 10 kg of .9999 gold. You might be able to trade your gold for differently sized baskets of goods and services in different years, and the size of future baskets will always be smaller than what you could have obtained if you had wisely invested in companies, but you will always be able to get something, even if the world has effectively ended.

Not saying that current level of debt is any good, there are just multiple levels to that story.

Then one year later we had the .com crash :-)