Is the U.S. economy and stock market on the brink of collapse? A black swan fund boss is preparing investors for this worst-case scenario. Like many other commentators, he believes the U.S. debt bubble is getting out of control. Yet, his suggestion for today’s stock traders will probably surprise you.

Mark Spitznagel founded Universa Investments. This fund is known as a “black swan” fund because it hedges against extreme, unpredictable events that could quickly send the economy and financial markets into a tailspin.

Spitznagel blames the Federal Reserve for putting America’s financial markets and economy at risk. At the same time, he cited advice from Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) CEO Warren Buffett. As you’ll see, this advice is actually quite traditional and sensible.

Black Swan Fund Investor’s Ominous Debt Bubble Warning

Spitznagel claims that the Federal Reserve has created what he calls a “tinderbox” economy. He compares the Fed’s strategy to a firefighter who puts out small wildfires too soon. This approach, according to Spitznagel’s analogy, means that the Fed is leaving huge amounts of fuel for a bigger fire/catastrophe in the future.

Furthermore, Spitznagel is concerned about America’s debt level. “We are in the greatest credit bubble in human history,” Spitznagel recently declared. He added that the U.S. is “living in an age of leverage, an age of credit, and it will have consequences.”

In addition, Spitznagel cited the Buffett Indicator as being unsustainably high. This indicator, credited to Buffett, compares the value of the total U.S. stock market against the nation’s gross domestic product (GDP).

What Does the Black Swan Fund Boss Recommend for Investors?

Interestingly, Spitznagel doesn’t recommend loading up on Treasury bonds or gold. Even though he feels that stock valuations are stretched, Spitznagel offers an old-school piece of advice.

Believe it or not, Spitznagel offered a Buffett-endorsed suggestion: buy and hold a low-cost index fund such as an S&P 500 tracker. In a tip of the hat to the Oracle of Omaha, Spitznagel said that this is “probably pretty good advice.”

I tend to concur with this idea. Most of all, I’m glad to see that even a black swan investor can offer time-tested, sensible investment ideas.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.