Let me start by being direct with you: our global economic system is showing signs of major stress. We're looking at the possibility of an upcoming crash that could be bigger than what we experienced in 2008. I know that sounds alarming, and I don't say it to be sensational—I say it because the warning signs are there, and we need to talk about them honestly.

What we're dealing with now is what some are calling the "Everything Bubble." Multiple asset classes—stocks, real estate, bonds—are all over-inflated at the same time. Think about what that means for a moment. This overlapping inflation means the next correction won't just affect one market like housing did in 2008. It could affect all markets simultaneously. And how did we get here? Years of cheap money and easy credit have fueled overvaluation across the board.

Now, here's why this time is different, and unfortunately, not in a good way. Unlike 2008, our governments and central banks have fewer tools left in their toolbox. Interest rates have already been raised. Debt levels are extraordinarily high. We're experiencing a global economic slowdown that reduces the buffer that usually helps protect us against crisis. And the leverage in the system? It's actually higher now than it was in the mid-2000s before everything fell apart.

So what might trigger this? That's the thing—it could be almost anything. A financial institution failing. A geopolitical conflict. A sudden market re-pricing. A central bank policy mistake. But here's what you need to understand: the worry isn't really about what the specific trigger will be. The worry is about how brittle the entire system has become.

Let's talk about household risk, because this affects real people—maybe you, maybe your neighbors. Many individuals are carrying high debt loads right now. Wages have not kept pace with inflation. Savings cushions are thinner than they were before 2020. When economic shocks hits families simply have less buffer to absorb them.

And investors? Many have developed serious blind spots. A lot of people believe the good times will just continue because markets recovered so quickly after 2020. But that's recency bias talking—it makes us underestimate danger. People have started assuming that central banks will always "save" the markets. That's a dangerous assumption.

The systemic vulnerabilities we're facing are real and mounting. Supply chains remain fragile. Geopolitical tensions are rising. High interest rates are putting stress on governments, businesses, and consumers all at once. Emerging markets are facing currency crises. All of these pressures are interconnected.

So what could this actually mean if things unravel? We're talking about the potential for a global recession. Sharp declines in asset values. Liquidity shortages, where it becomes harder to get loans or credit. Possible job losses and a significant slowdown in economic activity.

Now, I know that's sobering, but let me give you some practical principles for what you can do. But first, let me be clear about something crucial: every collapse is also a transfer of wealth. Money moves from people with debt to people who are liquid and can buy distressed assets. Money flows from the emotional to the disciplined. So the question isn't whether the system resets or even when it's going to reset. It's whether you're going to be solvent, educated, and ready when it resets.

First of all, please do not try to outsmart the market. Accept radical uncertainty. Getting the timing right in the market is next to impossible. Even heavy hitters like Michael Burry and Peter Schiff have been criticized for predicting twenty of the last two recessions. And the biggest names in the game, people like George Soros, understand how unpredictable things can be left to their own devices. So here's the big secret: they don't leave things to their own devices. They get involved in international politics. They fund campaigns, NGOs, and foreign governments. Soros is famous for literally breaking the back of the British pound. And guess who helped him? The current Secretary of the Treasury, Scott Bessent. These guys know how to play games that the average person is just not prepared for. When you're playing in the market, you're going up against people like that. Have the humility to know there are people and forces at work that are effectively impossible to map accurately.

Worst of all, you can be right on the direction of things and still get the timing wrong. I remind myself of this constantly. And if you're leveraged, getting the timing wrong is the same as being wrong. So your edge is discipline, preparation, position sizing, having personal rules, hedging your bets, and being patient. Think about Ray Dalio's approach of systems and diversification over trying to outsmart the quants and the ultra-wealthy who can sway international markets. Or think about Warren Buffett, who takes a fundamentals and price approach, eternally being patient and looking for good deals and only moving when there's a deal to be had.

Here are the kinds of operating principles to consider if you're going to take this approach. Build a portfolio around uncorrelated asset classes that won't all go up or down at the same time. Now, it's going to limit your upside—that is true. But it's also going to limit your downside. This is what Ray Dalio calls an all-weather strategy. Remember that financial assets have fundamentals that make them attractive in the long run. Focus on those fundamentals and look for quality assets at the right price. Look for businesses and assets that can withstand funding stress and price shocks.

Never forget that liquidity is oxygen. Debt gives you leverage, but it also puts you at risk. Keep cash on hand to keep your options open. The levered die first. Inflation is a risk to watch out for, but it's not nearly as risky for the average person as debt. Build your portfolio based on rules, not on your certainty around where the market is going, because you're inevitably going to be wrong about that. The only thing I can guarantee you about the future is that it will surprise you in some way, even as it adheres to timeless patterns. Again, you can be directionally correct and still get clobbered by bad timing.

All right, that covers the Dalio and Buffett approaches, at least in a nutshell. But there's a new voice that shares Dalio's historical lens, internalizes the influence that debt and policy have on economic movements, and puts together a game plan for investing during fiscal dominance. That phase where government spending and debt are so insane and over the top that the Fed can no longer come to the rescue. It's a plan popularized by Lyn Alden, and it goes like this.

There are three pillars to her diversification strategy. Pillar one: profitable growth equities. This is about fifty percent of your portfolio and is focused on businesses with pricing power, real margins, and the ability to grow cash flow even when the market is distressed. Pillar two: defensive assets in the form of cash and cash equivalents. These are short duration, high quality, and instantly deployable. They provide optionality and safety when volatility hits. This should be about twenty percent of the portfolio. Pillar three: inflation protection in the form of commodities and hard monies. Think energy commodities, precious metals like gold and silver, the companies that pull them out of the ground, and things like Bitcoin. This is going to be about thirty percent of the portfolio. Exact percentages will vary based on your own assessment of the markets, expected returns, and so on. But that gives you a rough idea of how to hedge against uncertainty during fiscal dominance.

Now, why do these approaches work in an everything bubble? Because they acknowledge the inherent uncertainty of timing while accepting that the math is clear. The debt flywheel guarantees that the bubble is going to burst because the economy is full of wild distortions right now, brought on by government interventions that have walked us into a trap where we break the system no matter what we do, short of extremely unlikely levels of unprecedented growth.

Burn this into your psyche: you don't beat a debt cycle with clever trades. You survive it with positioning that acknowledges the inherent uncertainty around timing. If you're trying to nail the exact top or bottom, you're competing with supercomputers, AI, and people rich enough and well-connected enough to move global markets. You will lose that game. You win by preparing for the fact that in a true ugly deleveraging, wealth moves from the leveraged to the liquid.

So your job right now is to get liquid enough to capitalize on opportunities, stay disciplined enough to avoid emotional moves, and stay in the market enough to not get eaten alive by inflation should this all play out on a longer than expected timeline.

What you should staunchly avoid doing is making all-in, all-out flips based on headlines. Don't reach for yield in junky, hyper-speculative assets based on FOMO. Don't use margin to buy the dip. Don't assume everything will just keep going up forever. And don't say anything even remotely like "this time it's different." Math is math. It's never different.

In the end, what's happening right now is not about fear. It's about the physics of money. We've acted for so long like we can deficit spend forever and that money can be printed for free. But now the bill has come due, and we realize there's no free money. The only way to avoid the devastation of compounding interest is to pay off your debt. But we've pathologically refused to even balance our budget, let alone pay our debt. So now the flood waters really are rising.

Barring historic levels of growth we have no reason to believe will happen, the economy is going to break under the weight of our debt. The final boss of the economic game is always compounding interest. It eventually demonstrates to the market that the debt will not get paid back, that debt holders will lose their money. And when that happens, confidence disappears. And when that happens, the government can no longer raise money through debt. And when that happens, the country defaults. And when that happens, it's game over.

So plan now. Build an all-weather strategy now. Because when the flood happens, it will be a flash flood, and only those on an ark are going to survive.