The only thing you are missing is the naivete of the investing public, the false assumption that the American empire can’t go under, and possibly the blind faith that the foreigners who supply our credit won’t pull our line in the face of their own economic insecurity and our profligacy.
OTOH, it may be more of a relative judgment…outside of Gold, if the U.S. were to suffer economic catastrophe, what investments wouldn’t go with it. Decouping hasn’t happened.
Regardless, this will end. The only thing giving me some confidence in the American economy is the fact that we don’t have the same level of unionization nor the same size public sector as other world economic powers-all things that will slow the adjustment of prices and wages toward the new equilibrium.
On that note, people have no idea how fast the unemployment rate is about to skyrocket. Not only are companies laying off workers, but boomers will be retiring at a slower rate, and people who were retired or semi-retired will be re-entering the workforce as their savings evaporate.
