We are another week closer to the day when the Empire of Bubble finally blows up.

When? How?

Oh, dear reader, if we were to tell you it would ruin the suspense. Besides, it is not given to man to know his fate. And here we let you in on a little secret…when you don't have a good answer, quote the classics.

And what do they say?

"What each man wishes, that he also believes to be true."

People prefer deception to truth. Lies, especially flattering lies, make them feel good about themselves. They are convenient and soothing, like diet cola - sweet and empty. The truth, by contrast, is too strong. It disturbs our digestion and troubles our sleep.

No, dear reader, give us mendacity any day.

One of the comforting lies that people want to hear today is that rising asset prices are the throbbing pulse of an economy in good health. And this is just one of the many 'fibs' that Americans happily lap up every day.

These days, a chart of practically anything is surging. Watches, executive aircraft, stamps, stocks in Zimbabwe, stocks in India - you name it. If asset prices are a measure of health, almost all the worlds' economies are Olympic athletes.

Leading the field, of course, are the Chinese - who really do look like Olympians. They're out in front in every sport. Already racing ahead five times as fast as the United States, the Chinese spurted ahead even faster recently, leaving economists stunned. At the close of the merry month of May, output from Chinese factories, mines and utilities was running more than 18% ahead of the previous year. Overall, the economy grew at an 11.1% rate during the first quarter. And Honda Motor Company (NYSE:HMC) says its plant in China will boost production by 71% this year.

Chinese speculators sold off their Shanghai shares recently, but the market is still sky high and threatens to push higher in the weeks ahead. China is awash in money with more than $1 trillion in reserves. And every working day, it earns another $1 billion in trade surplus.

If you believe the press reports, the Chinese put up a new city the size of Detroit every couple of weeks and build a new factory while we are taking our afternoon nap.

And now the Indian team is coming up fast, too. According to the International Herald Tribune, the Indians are sprinting - and speeding up around the bend. The Sensei index has broken through 14,000, and industrial production rose through April at a 13.6% rate.

Meanwhile, in the West, asset prices are zipping along, but real economies - middle-aged, fat, and sclerotic with taxes and regulation - are huffing and puffing like an asthmatic who's lost his inhaler. Detroit might like to compete with Chennai, but it is old and out-of-shape. What can it do?

The folks who used to work on the assembly lines are beginning to ask that question too. In Detroit, they're packing up and moving out. In the rest of the country, mortgage foreclosures hit a record in the first quarter, says Bloomberg. And down in Southern California, sales fell 34% from the year before.

But what's this? Prices actually rose overall in the Golden State. How could that be? We have a theory: Most of the slowdown is occurring in the subprime market - where prices are lowest. If most of the sales that didn't happen had been to subprime borrowers, the average sale price would rise.

Here in Britain, meanwhile, property prices are still going up too. But is this a good thing? The Daily Mail doesn't think so. "House price nightmare has already hit rural England," says a headline.

In Britain, as in the United States, house prices are up, but incomes aren't. An Englishman's home may be his castle, but the castles now sell for 10 times the salary the average Englishman can pay in many places. Only 55% of them can afford Home Sweet Home at today's prices; in the prosperous Southeast, the figure is only 30%.

But that's the trouble with truth. It is full of ambiguity, irony and paradox. The Englishman or Californian who sells his house now and moves to Paraguay is definitely ahead of the game. But the one who wants to buy a house looks like a loser.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.