To The Moon

Introduction: Unpacking Powell’s Warning

On September 24, 2025, Federal Reserve Chairman Jerome Powell remarked that U.S. stock valuations appear “quite high” by many measures. This statement triggered an immediate drop in the S&P 500, Dow, and Nasdaq, extending recent losses and sparking debates about a potential year-end crash or rally. At first glance, it might seem like a warning of a valuation bubble. However, a deeper look at the global economic landscape suggests Powell’s comment is more a routine caution than a harbinger of collapse. Amid a struggling global economy, volatile cryptocurrencies, and Europe’s political turmoil, U.S. stocks’ “high” valuations reflect a justified premium—America remains the only economy capable of anchoring the world’s capital. This article argues that, far from being overpriced, U.S. stock valuations are a rational choice in today’s chaotic environment.

Global Economies in Decline: A Universal Slowdown

Global growth forecasts for 2025 have been repeatedly slashed, with the International Monetary Fund and World Bank projecting GDP growth between 3.0% and 3.3%, well below the 3.7% historical average from 2000 to 2019. This isn’t a regional issue but a systemic slowdown affecting both emerging and developed markets. In China, the world’s second-largest economy, growth faces a triple threat: a real estate crisis, trade frictions, and an aging population. While first-quarter GDP hit 5.4%, exceeding expectations, weak demand persists, youth unemployment has eased to 14.5%, and inflation hovers between -1% and +1%. Exports briefly surged due to pre-tariff stockpiling, but a sharp drop in U.S.-bound shipments and a collapsing housing market—where construction accounts for nearly a third of GDP—continue to weigh heavily.

Europe is mired in stagnation. The Eurozone’s export collapse and sluggish industrial output have dragged growth expectations down to 1.5%, below earlier forecasts. Germany, the EU’s economic engine, sees unemployment rise to 4.7% with no growth, while France grapples with a political crisis and just 0.3% growth. South Asia offers some bright spots with 5.8% growth, but trade barriers and uncertainty dim the outlook. In Latin America, Brazil faces accelerating inflation, while Argentina and Peru see frequent protests, amplifying economic instability. Global trade fragmentation, policy uncertainty, and climate disasters like droughts have further eroded prospects for low-income countries, with foreign direct investment inflows declining sharply.

In this global “winter,” investors are flocking to safe havens. Why not other regions? Low returns and high risks make them unappealing. Meanwhile, the U.S. leads developed economies with a 2.6% GDP growth rate, robust consumer spending, and stable 4.3% unemployment. This isn’t a bubble—it’s a rational influx of capital.

Cryptocurrency Instability: A High-Stakes Casino

Cryptocurrencies, once touted as a hedge against global uncertainty, have become a volatile gamble in 2025. The September “red crash” erased $162 billion in market value, shrinking the total crypto market cap to $3.8 trillion. Bitcoin plummeted from $124,000 to $111,000, while Ethereum dropped below $4,000 from $4,953. Leveraged positions worth $1.7 billion were liquidated, with altcoins like XRP and Solana taking heavy hits, pushing market volatility to 70%.

September has historically been a “devil’s month” for crypto, with Bitcoin showing maximum volatility on Tuesdays and negative average returns. Ethereum benefits from the Fusaka fork but suffers from ETF outflows and seasonal weakness, posting a 3-4% monthly decline. Macro uncertainty and the Fed’s pivot to easing boost risk appetite, yet policy shifts trigger wild swings. Despite a $4.2 trillion market cap, crypto remains vulnerable to a stronger dollar and regulatory crackdowns. Institutional inflows into ETFs contrast with retail FOMO-driven spikes, as seen with meme coins like Toshi surging 80% in a day before crashing.

By comparison, U.S. stocks offer far lower volatility, with a beta of just 0.10. The “digital gold” narrative has crumbled, driving capital back to traditional assets like American equities.

Europe’s Political Mess: Immigration and Elections Fuel Chaos

Europe’s political landscape is a hotbed of instability in 2025. A wave of elections and protests sweeps the continent, with the immigration crisis deepening divisions. France has been in a state of near-anarchy since its 2024 parliamentary elections, with President Macron’s fragile coalition collapsing. Prime Minister Bayrou faces a no-confidence vote, and the “Block Everything” protests on September 7 paralyzed roads amid a resurgence of strike actions. The far-right National Rally (RN) leads polls, with socialist leaders calling it a “systemic failure.”

In Germany, immigration dominates the pre-election narrative, with the Alternative für Deutschland (AfD) party in second place and protests erupting over housing 300 refugees in a factory. Unemployment has climbed to 4.7%, and attitudes in cities like Oberhausen have hardened from “welcome refugees” to resistance. Austria’s Freedom Party (FPÖ) secured 29% of the vote, complicating coalition talks amid protest shadows. Belgium remains without a government since its 2024 election, and Bulgaria braces for its eighth election.

The immigration crisis acts as a catalyst: arrivals dropped 20% in the first five months of 2025, but the Syria conflict and climate disasters drive forced migration. The EU’s new migration pact shares responsibility—30,000 refugees annually or a €20,000 fine per refusal—but unilateral actions by member states deepen fragmentation. In Poland, nationalists won the presidential election with a “Poland First” platform, while Italy’s Meloni government cracks down on immigration despite the country’s lowest birth rate, where zero migration could halve its population. These political wounds foster “crisis tribes,” with climate and migration dominating voter sentiment and fueling far-right gains.

Adding insult to injury is Europe’s obsession with political correctness, which exacerbates economic damage. The 2020-2025 gender equality strategy has advanced, yet immigrant women face low employment rates and a 26% pension gap due to unequal pay and caregiving burdens. Policies emphasizing “rights perspectives” ignore skill mismatches, trapping many in low-wage informal sectors like domestic work, where human rights abuses are rampant. This approach strains public finances, widens pension deficits, and hampers growth. Scandals like Germany’s AfD spying ties to Russia and China, alongside France’s renewed Yellow Vest protests, paint political correctness as an elitist game, alienating citizens and dragging growth to just 1.2%-1.5%.

The U.S.: The Only Anchor for Global Capital

Amid the chaos, the U.S. shines. In 2025, it attracted 41% of global capital inflows, totaling $1.9 trillion, surpassing pre-pandemic levels. This surge reflects a robust recovery and safe-haven demand, with investments in infrastructure, clean energy, and semiconductors drawing funds from Canada, Japan, Korea, and the UK. Japanese FDI to the U.S. rose 20% in the first half of 2025, while investment in Mexico fell 21%, signaling confidence in U.S. ties.

The dollar remains the world’s reserve currency, and the Fed’s shift to easing in September bolstered risk assets. Forecasts predict U.S. GDP growth of 2.6% in 2025, driven by consumption and investment, with controllable 2.8% inflation. Despite tariff hikes (30% on China, 5% on the EU), the USMCA agreement ensures compliance, keeping growth above the global average. Corporate EBITDA grows steadily, with comfortable interest coverage ratios and low recession risk.

The S&P 500’s P/E ratio of 20.50, while elevated, is below historical peaks and reasonable compared to global peers. Historical data shows year-end rallies are common, with September pullbacks typically short-lived. This isn’t a bubble—it’s a “safety premium.”

Conclusion: Buy and Hold—U.S. Valuations Are Justified

Powell’s warning sparked fear, but the global economic downturn, crypto volatility, and Europe’s political mess prove U.S. stock valuations are not overpriced—they’re a rational refuge. Investors should tune out the noise, hold their positions, and watch November earnings and Fed moves. A year-end rally to 5,500 on the S&P 500 is within reach. In this “everywhere-else-is-worse” 2025, America remains the winner.

References:

• Powell’s statement on U.S. stock valuations, Sep 24, 2025.

• IMF World Economic Outlook, 2025.

• McKinsey Global Economics Intelligence, July 2025.

• Deloitte Global Weekly Economic Update, Sep 23, 2025.

• IMF World Economic Outlook Update, July 2025.

• US Bank Analysis on China’s Economy, Sep 23, 2025.

• ICG Global Economic Update, Sep 18, 2025.

• Munich Re Global Growth Outlook, 2025.

• Galaxy Asset Management Crypto Commentary, Sep 2025.

• CoinDesk on Bitcoin Volatility, Mar 18, 2025.

• CoinDCX Crypto Bull Run Analysis, Sep 11, 2025.

• Economic Times on Crypto Crash, Sep 23, 2025.

• Daily Sabah on Europe in 2025, Jan 17, 2025.

• Vision of Humanity on Political Disruption, Jan 13, 2025.

• ECFR on Europe’s Election Year, May 19, 2025.

• Wikipedia on French Political Crisis, Sep 22, 2025.

• Reuters on Germany’s Refugee Housing, Feb 12, 2025.

• BBC on German Immigration Tensions, Feb 18, 2025.

• Carnegie on Europe’s Instability, May 2024 (updated 2025).

• Wilson Center on Bulgaria Crisis, 2025.

• NYT on Europe’s Migration Turn, Jun 29, 2025.

• Brookings on Europe’s Migration Shift, Oct 24, 2024 (relevant 2025).

• Guardian on France’s Rift, Sep 7, 2025.

• Euronews on France’s Instability, Sep 5, 2025.

• Euractiv on Headless Europe, Jan 10, 2025.

• Guardian on Europe’s Population Crisis, Feb 18, 2025.

• Reuters on U.S. Capital Flows, Jan 10, 2025.

• U.S. Gov ERP Chapter 6, 2025.

• Deloitte U.S. Economic Forecast Q1 2025.

• Deloitte U.S. Economic Forecast Q2 2025.

• Deloitte Global Weekly Update, Sep 23, 2025.

• HRW World Report 2025: EU.

• EIGE Policy Brief: Gender & Migration.

• EIGE on Migration and Gender.