This Bloomberg article shows that housing, unemployment, bond, and stocks are fully recovered from the 2008 crisis.

Everything looks good until the last plot, which is the Fed’s balance sheet.

If this doesn’t scare you then it should. Basically, a bloated Fed’s balance sheet caused the skyrocketing of everything…And given that fundamentals have not changed and productivity is not rising, well, as soon as there is a crisis, things will be ugly. And the Fed will not be able to save the economy given a monstrous balance sheet.

So what can be done? Well, here are some strategies.

  • In times of asset bubbles, hold on to gold. Gold will hold its value even in the darkest days.
  • Have cash, of course, cash will lose value but it will not disappear instantly. In fact, many institutional investors are increasing their cash holdings.
  • Get an additional source of income. Airbnb and Uber may be a good start.
  • Grow your own food. I am not being apocalyptic but farming does not only produce fresh food but helps you mentally (time off with nature). Plus, Jim Rogers thinks that US’ future is in farming.
  • Buy in bulk. I am not saying you should prepare for doom’s day. But buying bulk saves you money through discounts of ranging in 10% to sometimes even 50%.

Should we start panicking? Nope, banks are well capitalized and regulators are always worried about the next recession but it never hurts to be more cautious.