The long boom we've had since the bottom of the last cycle in 1982 - a time that was characterized by high unemployment, lots of bankruptcies, high interest rates, and a low stock market - has lasted 25 years. It could have ended badly a number of times along the way, such as 1987, 1993, or 2000. Each time the government propped the house of cards up higher by injecting more currency into the system. It's analogous to someone driving a high-performance car on a mountain road with a stuck throttle. The driver can mash on the brakes, slowing it from 50 to 30. The car charges to 80, but this time the fading brakes can only bring it down to 60. After a couple of cycles, it's going 140. And Ben Bernanke is no Michael Schumacher. Perhaps he can navigate the road. But the chances are better, at this point, that the economy will go off a cliff.

So, if we're going to have a recession, what should you do about it? My advice is to own a lot of gold. That's because it's the only financial asset that's not somebody else's liability. That's important whether the recession is deflationary or inflationary in nature. Deflationary depressions are characterized by lots of bankruptcies and defaults; the only assets you can count on are those in your own possession, like cash or gold. Currency becomes more valuable because so much is wiped out in defaults. But gold is the ultimate form of cash. Inflationary depressions, however, wipe out the currency itself, which loses value rapidly, because the government creates so much more. Gold profits from this process. Beranke believes in printing money to help the economy.

Is this the start of something big and nasty? It's impossible to say. But the slap the markets have administered upside the back of everyone's head should alert them to the possibility. You want lots of gold. Limited debt. International diversification. And some situations - like my recommended gold stocks - that present some real speculative upside.