The Fed’s policy of liquidity at all costs is causing capital destruction. This capital destruction looks like growth and causes asset prices to inflate.

For those of us that cannot hedge against this in the markets, and are too young or poor to wait for the crash,

What do we do? I might suggest that one works on building capital that is being destroyed by easy money. Yes, the capital built will be less productive and more expensive for now. But when the crash comes, you have working capital. This is best done as a side job and debt free

Mark Spitznagel talks about capital destruction that stems from artificial interest rates and price distortions in the "Dao of Capital." the http://msindex.net  does not lie and Spitznagel advice to get out of the way and save cash for the crash and be ready to buy.

Another strategy is to insure with very OTM puts if one has a portfolio.

But what do people like me do? I don't have a portfolio, I don't have a lot of cash saved that I can wait to purchase distressed assets when the crash comes. I am also not able to really by puts as it takes sophistication I do not have. I am not a trader.

As I reread Dao of Capital. I realized that the process of capital destruction leaves vacumes of useful capital in local regions. The easy financing of mega corporations destroys small, local competitors... at first. But at a certain stage, the big guys don't care about local.

A smaller company, that is flexible, could easily rebuild the local capital that was destroyed. What does that look like?

Turns out, that's what I have been doing for some time, but did not grasp it. Here are two examples. 1. I knew there were some people that wanted quality beef. The feedlot system is disgusting, and a small part of the population wanted local beef.

The big corps killed all the local butcher shops in favor of just a few mega factories. (they did this with cheap financing from the government, plus some good lobbyists.) But that also meant, is that would not notice or care if I worked with one little processor in town.

So I had some cattle, not in the system, and we know that local cattle markets had been killed, so it was cheap to give a try (relativity cheap). We have been learning and building from there.

The community newspaper is another place were big hedge funds and banks have used cheap borrowing to buy newspapers, fire the staff, and milk the capital and profits out of the newspaper, and eventually shut down and sell off the carcasses.

But if we assume readers still want local information, it means there is now a vacuum in local media that can be filled at very low cost and very good profit.

The point here is that Federal Reserve has created an economic system that lives on capital destruction, convinced it is growth. Like dipping into the principle of a portfolio and convincing yourself you are getting richer the more you eat into the principle.

This will lead to economic crashes. But the capital destruction before the crash means a vacuum is being created, generally locally that can be filled by someone will give it a try. The cost is generally low and the risks limited, even to the point that

some with just time and hustle can start to take advantage of.

In short, I identify places where capital destruction is taking place (marked by heavy debt loads of the big corporation engaged in the destruction) and find a local solution to replacing the vacuum created.

As @nntaleb would say "Better to make lemonade out of lemons" or @GrantSSC "Identify, adapt, overcome."