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Bernanke out by August, QE ends, rates up: Crash

Paul B. Farrell
MarketWatch [1]
May 24, 2013

The “Dr. Boom” scenario: America is about to “unleash a spending spree. Years of self-denial give way to pent-up demand,” predicts UBS economist Maury Harris in USA Today’s bold lead story.

His clue? Consumer sentiment: “Harris estimates that in the next five years, catch-up consumption will boost annual consumer spending growth by a half point to above 3% from about 2%.”

Reassuring? No, wishful thinking. Be very skeptical. As Robert Kuttner, author of the new “Debtors’ Prison: The Politics of Austerity Versus Prosperity” once wrote in BusinessWeek, “What do you call an economist with a prediction? Wrong.”

Harris is bucking the headwinds of history. As Jeremy Grantham, chief strategist of the $100 billion GMO money managers, recently told InvestmentNews, the newspaper of record for America’s 90,000 professional investment advisers, “3% annual GDP growth is history.”

Full article here [1]