What do these CEOs know that we don’t?
What do these CEOs know that we don’t? by Simon Black
Last night a good friend of mine came over for dinner.
He’s originally from Poland, and growing up there he heard a lot of bizarre stories about what it was like during the Nazi invasion and World War II.
In 1939, even as 1.5 million German soldiers prepared to invade, the general mood in Poland couldn’t have been more carefree.
My friend’s grandfather once told him that, just prior to the Nazi invasion, the schools in Poland announced they were suspending classes… but only for two weeks, because that’s how long they expected the war to last.
It’s as if everyone acknowledged there would be -some- conflict… but totally underestimated its impact and magnitude.
All the “experts” had forecast a clean and speedy victory, and that life would go on as normal soon.
They couldn’t have been more wrong.
My friend is utterly bewildered that his family didn’t have the foresight to escape prior to the invasion.
But they remained in Poland, along with millions of others, and willfully chose to ignore an obvious threat that ended up having life-changing consequences.
This week we’ve been discussing another obvious threat that most people willfully choose to ignore– the appalling level of US debt.
It’s amazing– as a percentage of GDP, the US has racked up more debt than most impoverished countries in Africa.
The trend holds across the West: Japan, Italy, Greece, France, UK, etc. all share unsustainable indebtedness.
But as we discussed yesterday, government debt is a long-term threat, especially for the United States whose dollar is still the world’s dominant reserve currency.
Despite the debt ceiling fiasco, it’s unlikely there will be a major debt crisis tomorrow. This threat will continue to build.
There are some threats, however, that are much more immediate, and I want to spend the next few days addressing those, starting with this one:
The US stock market is hopelessly overvalued.
By nearly every objective metric, US stocks are ridiculously expensive.