I sit here at Virgin Atlantic?s upper class lounge at London?s Heathrow airport, awaiting their transcontinental nonstop service to San Francisco, listening to Bach?s Sonata No.1 in G Minor on my headphones. I am returning from a two-month tour of Europe that was highly informative, exciting, and even mind expanding. The proof is the ten new pounds that I am packing under my belt.

Living in the US, all I hear about are America?s weaknesses and the strength?s of foreign countries, mostly China. Traveling abroad, one is barraged with admiration for our country?s strengths and endless mewling about their weaknesses. So to look at the United States objectively, it is necessary to spend a certain amount of time abroad. This I did in spades.

It was first class and five stars all the way. I?m talking palaces, presidential suites, and Michelin three star restaurants. My credit card is worn out, the magnetic strip a mere fragment of its former self, and shall be retired to stud when I get home. PayPal is laughing all the way to the bank. As for my travel blazer, it needs to be shot and buried, being far beyond the reach of even the most diligent dry cleaner.

My global strategy luncheons in London, Amsterdam, Berlin, Frankfurt, Portofino, Mykonos, and Zermatt were a blowout success. Several venues required rebooking to larger facilities to accommodate greater than anticipated numbers.

It appears that a 37% return in a year when everyone else is tearing their hair out is a real crowd draw. All went away with a broadened view of the world, and I picked up some first class intelligence. It was well worth the investment for all.

The adventures came fast and furious. I picked up a new fedora at Locke & Co., just down St. James Street from my old office at The Economist magazine, the firm that supplied Lord Nelson of Trafalgar and all the kings and queens of England with their fine hats. Tea at the Ritz is a people watching experience par excellence.

The red light district in Amsterdam has gone tourist, with families perusing the bikini clad ladies of the evening in the bay windows, who are now mostly from Russia. After a major cleaning job, Rembrandt?s Night Watch looks even better than it did when I first saw it 45 years ago. The international flower market performed a logistical masterpiece that would have done the founders of the original Dutch East India Company proud.

The city of Dresden was a cultural gem long outside my reach in the old communist East Germany. The shadow of the mass firebombing that killed most of the population in 1945 is ever present. Looking at the crown jewels of the Saxon kings, it is easy to understand from where the anti tax movement sprung.

It was an emotional moment for me riding my bicycle across the site of the former Berlin Wall. Where machine guns once threatened, a million flowers now bloom. My deluxe accommodations at the Hotel Adlon were the old wartime Gestapo headquarters. That is a vast improvement over the dilapidated student dormitory where I stayed in the sixties, which, remarkably, is still standing. Goering?s solidly built Air Ministry still exists just down the street, an Art Deco tour de force. Scouring the city?s vintage shops, I managed to score an Italian embroidered suede alpine jacket that fit perfectly for only ?8.

My free afternoon in Frankfurt?s botanical gardens saw me curiously exploring such oddities as barrel cactus, cholla, and octillo, the kinds of flora we have in abundance in the deserts back home.

Portofino, on the Italian Riviera, was beautiful to look at, but was plagued by European summer vacations crowds that are typical for this time of year. One only hoped that the competing Russian oligarchs attempting to maneuver their mega yachts into the village?s tiny harbor didn?t break out into a shooting war. Watching a pod of dolphins race with the bow of our own ship made it all worth it.

The worst nightmare of the trip was the check in at budget Meridian Airlines for the flight to Mykonos. It was me and 200 hard partying Italian kids. The seats were jammed so close together I nearly suffered a double amputation (see photo below). It was so disorganized I barely made the flight. Better to leave the Italians to food, fashion, and race cars, than to running airlines and cruise ships.

With Italy in its third year of recession, the bargains in Milan were to die for. The children are outfitted for the next two years. I even bought clothes for people I didn?t like, and shipped them home in suitcases bought at 50% off. Only the 100 degree heat and the clouds of mosquitoes drove me away from a longer stay. There?s nothing like flaunting death in a taxi racing to the airport at 100 miles per hour tailgating the car in front by ten feet.

Mykonos was the first ?sit on the beach and do nothing? holiday I?ve enjoyed in many years. But I still got a lot of writing done between racing around the island on a beat up quadracycle and the girls dancing on the tables.

I finally made it to the top of the Matterhorn in Switzerland, all 14,800 feet of it. Knock that item off the bucket list. What I hadn?t bargained for was the rescue effort I got involved in on the way down. More on that in a future piece. Zermatt is a fantasy destination that I will keep returning to every year to climb as long as I live. Having just bagged my 45 year pin from the tourist bureau, can I shoot for 90?

I completed my journey by climbing the highest mountain in Wales, Mount Snowdon. The weather was perfect, rare for this part of the world. I took it as a good omen for the future. Scaling rocky crags, the view of the lakes and the Irish Sea was breathtaking. By then I was just plum worn out from traveling, and longed for my own bed and the morning edition of the San Francisco Chronicle, even one soaked by the sprinklers. California wine is looking pretty good right now, with the fall harvest fast upon us.

I return with a new lease on life, my batteries recharged, and chomping at the bit. It doesn?t hurt that my Trade Alert performance is tickling yet another all time high, up 92% since inception two and a half years ago. I?ll get some new Trade Alerts out soon to throw the hard core traders among you some red meat. It is going to be a very good year.

Many thanks for all your support. You, the readers, make it all worth it.

I?m on the plane now, two hours into the Atlantic. Below are the endless glaciers and snowfields of Greenland. I?ve made it all the way to Bach?s Partita No. II in D Minor. Iceland is in our rear view mirror. The stewardess is asking me to make room for my steak and cabernet. So that?s it for now.

I am writing this in the second-class cabin of the Wales to London express train, which is packed to the gills with holiday revelers. In the adjacent seat there is a gaggle of four young ladies dressed to the, nines sporting feathers from their hats, obviously headed for a late summer wedding. They are sharing a bottle of Cava, or cheap Spanish Champagne, and the spirited conversation is increasing in volume with each passing mile. As it is all in Welsh I can?t understand a word.

Nevertheless, I shall attempt to impart to you some market insights, even in these most trying of conditions.

There is a major contradiction going on in the US economy these days. The government data releases speak of a feeble rate of business expansion that is puttering along at only 2% rate. But speak to the CEO?s of major companies and they talk of growth, expansion, and increased capital investment with a guarded optimism that lines up with a more robust 4% GDP growth rate. This is going on not just into the US, but in Europe, Asia, and Australia as well.

Who?s got it right, the government, or the CEO?s?

One of the most valuable lessons I learned as a journalist many decades ago is that you always follow the companies. Speak to management, and they will magically reveal trends that won?t show up in the public data releases for months, or even years. And capital always follows the companies, as JP Morgan head of investment, Carl Van Horne, once told me.

That is one of the many reasons you read this letter, to discover economy trends before the rest of the world does. And what is the collective wisdom of the planet?s CEO?s? That things are a lot better than they appear. Who has already figured this out? The stock market. This is why the S& P earnings multiple has expanded by tree points this year, from 12.5X to 15.5X, or some 25%. This is also why this has been the most hated stock market rally in history.

I have always been a strong believer in the wisdom of crowds, that markets see events and their implications well before single individuals can. A good example is the 1942 Battle of Midway, where Japan lost four aircraft carriers, thanks to a masterstroke of American intelligence. Look at your 100-year stock charts, and you will see this, to the day, marked the beginning of a bull market that lasted until the early 1970?s, even though the actual outcome of the battle was kept top secret for years.

However, I think there is much more going on here than human mass psychology. When guests ask at my lectures and luncheons about the accuracy of government data coming out of China, I shoot back ?What about our data?? The entire field of government statistics is greatly flawed, no matter who is issuing it.

As a former scientist, I was horrified when I first saw such large bets placed by investors on such weak information. As my college math professor used to say, ?Statistics are like a bikini. What they reveal is fascinating, but what they conceal is essential.?

The very nature of government information collecting guarantees that it is riddled with flaws. The US is a massive country, with reporting entities often reaching the tens of thousands. The time frame over which of these collects data can vary, leading to wonderful apple an orange comparisons. Surveys are the worst, easily falling victim to the natural human tendency to tell people what they want to hear. Often, they say the opposite of what they believe.

Then there is the GDP. The pattern that has emerged over recent years has been for a number to start out strong, and then get revised down substantially in the following quarters. Or visa versa. The monthly nonfarm payrolls are even worse.

This is why PIMCO boss, Bill Gross, says that the weekly jobless claims are the one statistical update he?d welcome if stranded on a desert island. A least the mistakes are flushed out every week, rather than monthly or quarterly. For what its worth, that number is at 330,000, a five year low, predicting further share price gains.

The Treasury?s Bureau of Economic Analysis has recently tried to bring the GDP numbers closer to reality by redefining the term. It finally changed ?research and investment? from an expense to an investment to be depreciated over many years, which it really is.

It also created a new category for ?intellectual property?. What are the reruns of ?Bewitched?, ?Bonanza,? and ?Gilligan?s Island? worth? Before, it was nothing. Now it is something. This has enormous implications for technology companies and content creators of every stripe, including myself. That Hedge Fund Radio interview I did with Barton Biggs four years ago is still generating mouse clicks, and therefore revenues, even though he sadly passed away last year. Barton would be proud.

All told, the changes added $560 billion to US GDP, taking the total up 3.6% to $16.6 trillion. That is the equivalent to adding another State of New Jersey to our economy out of thin air. Of course, the right cried foul, as it always does, deriding the attempt to make the country look better than it actually is. In reality, the government data is still miles away from reflecting a true picture of the economy. So what changes are coming next is anyone?s guess.

I?ll ask Treasury Secretary, Jack Lew, when I meet him in person on Thursday.

Well, the ladies next door are fairly plastered now, having moved up from Champagne to blueberry Vodka. One girl is clearly wearing more of her drink than she has imbibed. They have even offered the kindly, white haired old man with the beard in the next seat a glass. I will, no doubt, regale them with great wisdom on the pleasures and pitfalls of married life.

So that?s it for now.

Treasury Secretary Jack Lew