Neurotoxin, you have to understand that, unfortunately, this world is full of people who want to tell you what to do with your money. Due to this, and the history as-of-lately of the stock market and all that relates to it, I find it a tad irrational that you will not accept critizism.
I happen to agree with you on many points, like Bush fucking up our economy, lack of confidence in ANY market, inflation rearing its ugly head, etc. But you also have to understand that it's not all these factors put together that could make for a nasty crash. It's actually what has happened for the past 15-20 years, market-wise, that will make this particular crash one to remember.
For starters, the crash in the 80s hit a lot of people really hard. Still, unemployment was low, inflation controlled, oil cheap and lots of money to throw around, so people did not give a shit about losing 30-40% of their portfolio's value, or that it took them 5-10 years to gain it all back.
10 years go by, oil still dirt cheap, and all of a sudden you start hearing all these rumours about the "net" and how it's going to be the next big thing. Your cousin, your mother in law and everyone in the neighborhood keeps buzzing about it and all of a sudden this rumour takes on a life of its own. Before you know it gazillions are being poured into this industry, everything is interconnected from here to Tajikistan, paid for thanks to the American small investors, and it now becomes more than a rumour.
To make a long story short, everyone told you to buy and the majority of people listened. When the hype couldn't be sustained the market crashed. In hindsight, all those who lost money should've seen red flags everywhere. I mean, a small two-person company IN NO FUCKING way can have a market capitalization of 450 million dollars because there is no way 2 people cannot produce 450 million worth of stuff. And there were THOUSANDS of these type of companies everywhere at the time. Companies spinning off their frigging bathrooms, sister-in-law to get their hands on cash for ideas that are esentially the equivalent of a pyramid scheme... people falling for it and the government doing nothing about it.
Once we had recouped from the internet crash, which took a LOT of people's retirement money (someone's gotta pay for all that infrastructure beind laid out, and 99% of the time the companies will not pay for it, it's you and I) we then found out that the house we had been living in for 20 years is now a goldmine. The real estate market started getting out of control and all of a sudden a house in Queens, New York, is selling for $600,000, when LOGIC tells us that there ain't no way a "shoebox" in Queens is worth that amount of money.
That should be a red flag the size of Mt Vesuvius. Needless to say the fact that your house was appraised at 65% of market value should've made you stop right there and then and told the real estate broker to go fuck himself. He knows the house is not worth $600,000, yet he is coniving you into buying it under the false pretense that housing prices will go up from now to eternity and you will never find the same house for the same price again in your life, when they know they're lying. And people fucking fall for it!!!
On top of that you have all these huge financial conglomerates structuring debt backed by all these mortgage pool which THEY FUCKING KNOW are way overblown and built around nothing more than wild capitalistic speculation, hence no REAL value, feeding the frenzy. Merrill, UBS, Credit Suisse, etc., all of them got caught with their pants down and lost huge amounts of money because, even though they have internal mechanisms to prevent it (or so they say, because Merrill Lynch's CEO made out like a banshee, taking home more than a quarter of a BILLION dollars and a pension of 1.5 million per year for the rest of his life for creating ZERO value), they did diddly shit to stop it. Let me tell you, ANY fucking compliance department in any company IS ROYALLY FULL OF SHIT! Otherwise the real estate crash wouldn't have hit their respective companies so hard.
I work in the financial services industries and have some, although limited, knowledge of what to do with my money. So far, from all I've read, conventional wisdom will lose you dinero. I see warning signs in all the diversification hype. It will bite everyone in the ass eventually. If you look at the largest fortunes (Warren Buffett, George Soros, etc.) and how they were made, there is one single common factor amongst them: They buy when everyone sells, and they sell when everyone buys. Which is exactly the opposite of what 99% of the street is telling you.
You'll see, once the market crashes, these people, the Berkshite-Hathaways, Goldman Sachs, et all, will buy all the shit you currently own at 25% of its true value, say at $2 and resell it to you 20 years later at 150 times that price. They get away with it not because they're too smart, but because we are too stupid to know.
After all of this, all you're basically left with is "who do I believe?". I DO BELIEVE, this time around, investor confidence will be eroded to the point that the market will have a hard time, as you say, rallying back to 1985 levels. A lot of money will be taken out of circulation and put into physicals, like commodities, for good. The stock market will be hit hard.
C-ya.
