Notwithstanding hopeful hype about “recovery” mainly driven by unsustainable monetary and fiscal stimulus, the U.S. economy is headed for a wrenching adjustment that will push living standards down. I expect to see half a century’s worth of economic progress wiped away.

To a degree that few appreciate, the rapid development of the BRIC economies, especially India and China, implies a write-off of trillions in middle class wealth that prices in assumptions of economic dormancy in the rest of the world.

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