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Comment by michalu | Hacker News Reader

During the height of the bitcoin bubble I had my gym coach leave job and become "crypto investor" ... Katy Perry changed her nails to each look like one of the popular coins. And yes I did have an uber driver talk to me about crypto. The mainstream media were shilling Ripple at its highest price ever.

Today, all the same people talk about coming recession.

I was lucky to have my first job in finance during the credit crunch crisis. Until it was over media we're adamant it's just a correction. We did not believe it either ... we all thought it's a good time to buy cheap before the next bull run. Only about 3 people actually predicted it (even though AFTER the recession media came up with a dozen people who claimed so - none of them ever made any bets on it)

It's hard to imagine recession come when everyone expects it.

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It's hard to imagine a stock market crash coming when everyone already expects it, but it's quite easy to imagine a recession coming when everyone expects it.

If people expect stocks to crash, then the expected "crash" is probably already priced in. If people expect a recession, then the reduction in economic activity is something of a self-fulfilling prophecy.

I think many who expect a recession have been expecting one for years. They have been watching from the sidelines as the market passed them by.

That's why the fear of losing out dominates everything else right now and every mini correction gets bought - until something unexpected happens.

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

The usual argument regarding the stock market crash is that even if it's coming, it's hard to predict when, and it's great investment long term even if it crashes temporarily.

At this point I think it just depends on what the central banks want, as they took control over stock market prices with the low interest rates.

> it's great investment long term even if it crashes temporarily.

That's not really true outside the US. And in fact it's not even true for the smaller cap stocks in the US. The Japanese stock market being the most cited foreign example of the opposite. Pretty much everywhere outside the US the stock market is very vulnerable. Odds are this will come to the US sooner or later.

They can QE forever to feed the demand, however it's on the whim of a few powerful people when and how some shortage will occur. Stocks grew 20% YoY with flat earnings in the last few years. Price discovery and market signals are dying, but they are dying for both directions up or down.

Many analysts expect asset prices and income inequality to be a major topic of debate this election and we don't know yet if Fed policy will be at the crosshairs. Either way social justice impulse will be stronger against the tech giants either thru cancel culture or outright riots.

You’re right, I’m in the gold / silver / Bitcoin believer minority, I don’t see any other safe place for my money long term, as I believe that those are the only things that can’t be manipulated easily long term.

Gold is a leveraged bet on negative yielding bonds these days: https://www.youtube.com/watch?v=lYNCpWo7Ucg

It is "manipulated" to the same extent as anything else.

As cash is too easy to print, I would still prefer to look at gold/SNP500 ratio, gold/house price or other gold/stock ratios (even though you're right about the correlation between gold price and inverse bond yields).

Of course as technology is getting faster and creating more value, and people are moving to cities, it's hard to get a correct valuation, but still gold seems undervalued compared to these other asset classes.

I agree.

Jack Bogle goes as far as saying you don't need to own international stocks. If I recall he says that the US has a innovative and growth mindset, and is stable... So we would always be growing in the long term. https://www.investmentnews.com/article/20170429/FREE/1704299...

Not diversifying by geography is one of the most risky decisions possible - https://www.bridgewater.com/research-library/daily-observati... - and it is one of the biggest mistakes that most investors are making right now (it happens every time).

Be clear: you are betting if you take Bogle's advice. You are going all-in. If you know what you are doing, great...but that is probably not the case.

A handful of countries have cut interest rates because the global economy is slowing down. India, China, U.S., Mexico, Brazil, etc.

>It's hard to imagine recession come when everyone expects it.

Especially when those in power are doing everything they can to prevent it. The Federal reserve has a trading floor and participates as a proxy for the government in the markets. There is also the rumored Plunge Protection Team. We actually have markets pricing in the likelihood of further quantitative easing 11 years after it was first done to address a prior crash. And for it all, we have only really accomplished concentrating wealth and increasing income inequality.

None of the above really appears sound. I expect things to change, mainly because I think the above cannot continue indefinitely.

I agree with what You said.

However, You can still have downward spiral even in case "everyone is talking/preparing for coming crisis". Imagine this:

- China going finally bust

- honkong peg to dolar broken (financial companies there going bust)

- australia mining slowdown and property market bust

- australia banking woes

Even though there are money on the sidelines, you can have crisis and even more money on the sidelines during few fearful quarters.

in your pipe dream.

The RBA has announced QE. China is shutting down banks.

I don't think any sane person doubts that China is going to have a debt crisis btw (it started a while ago), the question is whether they can do what they did in 1997.

But yeah: already started.

I agree with you for most part but remember dead clock is right at least twice a day.

When the street gets out, it's time to get in.

When the street gets out a recession has started. Probably still a good time to get in, nonetheless

My hypothesis is that we are experiencing high inflation and that's the recession.

And before anyone says "fed reserve 2 percent", the federal reserve is known to lie.

Yes, we might finally be seeing all that QE cash trickle down to the street. First it reinflated stocks and real estate after the deflationary 2008 crash, and now its flowing into other prices.

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