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The author is the chair of Rockefeller International. His latest book is 'What went wrong with capitalism'

After tagging America's largest share of global financial markets "The mother of all bubbles“In my previous column, the main pushback I got, even from some people who shared my views, was that there was no sign that this bubble was going to deflate anytime soon.

Almost no one predicts an impending pop. Virtually every Wall Street analyst predicts that US stocks will continue to outperform the rest of the world in 2025. But all this excitement only confirms that the bubble is at a very advanced stage. If the consensus on "American exceptionalism" is so overwhelming, who is left to jump on the bandwagon and amplify it?

Wall Street certainty has spilled over into the popular media, which often pick up on market trends only when they are well established and nearing an end. Hype for American excellence is now synonymous with TV, radio, podcasts, newspaper columns and magazine cover stories, with a track record of pointing in the wrong direction on future trends.

Bulls say the U.S. can remain dominant because of the impressive earnings of the country's corporations. But US earnings growth wouldn't seem so exceptional if not for the superlative profits of its big tech firms, and massive government spending. Over time, superlative profits are contested. Growth and profitability are also getting an artificial lift from the heaviest deficit spending ever recorded at this stage of the economic cycle.

Most economists nevertheless argue that, with the balance sheets of US households and companies in good shape, the economic boom will continue. Some who worry about President-elect Donald Trump's tariffs or immigration plans think they will hurt foreign economies more than America.

But every hero has a fatal flaw. The US government is increasingly addicted to debt. My calculations suggest that about $2 of new government debt is now needed to generate an additional $1 of US GDP growth—a 50 percent increase over just five years ago. If any other country were spending like this, investors would be fleeing, but for now, they think America, as the world's leading economy and issuer of reserve currency, can get away with anything.

Presumably, by some point next year, investors will demand higher interest rates or a show of fiscal discipline, perhaps triggered by another big deficit or an ever-larger auction of Treasuries. These demands would wean America off its reliance on government spending, at least temporarily, and in turn undermine economic growth and corporate profits.

To be clear, this is a bubble in US performance relative to the rest of the world, not a 1990s style mania in the US market. Therefore, if the options start to look more attractive it can reduce in a natural way.

Maybe Germany and France will get their economic act together, ie Greece and Spain did it a decade ago When under pressure. Maybe Beijing, under pressure from Trump tariffs and weak domestic demand, will finally boost consumption to stabilize the economy.

But, mesmerized by "American exceptionalism," analysts can only talk about how America has been the world's dominant market for a century. They forget that in six of the last 11 decades, the country's stock market lagged the rest of the world, most recently in the 2000s when it delivered zero returns and tripled the value of emerging markets. As that decade drew to a close, attitudes in emerging markets echoed the certainty I now hear about America: "Where else is the money going to go?"

Outstanding performance relative to other countries could end if growth slows in the United States, or increases in other major powers, or for unknown reasons. This is how bubbles often end: suddenly. The two most recent in global markets were the commodity boom, which began to burst in 2011 as new supply surged, and China's growth bubble, which collapsed in 2021 amid a state crackdown on the property sector. .

The longer a trend lasts, the more confident investors become, and the more blindly they buy into mania. In the late stages of a bubble, prices are usually parabolic, and over the past six months US stock prices have outperformed others by the widest margin for any comparable period in at least a quarter century. When flying in such thin air, it doesn't take long to stall the engines. Extreme prices, valuations, and sentiment all signal that the end is near. It's time to bet against "American exceptionalism."