Here is something to keep in mind from a tactical point of view while you decide whether to confront or not.
The other man is also going to step up his efforts once he sees you doing so. Keeping what you know a secret merely ices the cake as the middle (your wife) gets played from both sides. Her knowing that you know takes some of the fantasy out of that.
NOP, let me be sure I follow you. Are you saying it's GOOD to take the fantasy out of it for her, or it's BAD? I'm thinking it's GOOD, as she's made a bunch of comments recently, esp. to our daughters when talking about their own BF problems, that "sometimes it's good to keep them guessing." It's like she WANTS more intrigue in her life???
