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Aruba, March 14, 2013 - With the UK economy going sideways and continental Europe in the doldrums, all eyes are on the US. It could be a "breakout" year. That's the phrase used by a respected group of analysts at Société Générale, who believe the US economy, after years spent taxiing down the runway, is about to take off. Friday's jobs numbers, which showed the unemployment rate tumbling to 7.7% from 7.9%, added to the growing euphoria.

Such is the momentum that many who make their money on the US stock market are preparing for the day when the Federal Reserve stops pumping money into the economy. Before too long, they argue, it will even be forced to raise interest rates.

According to analysts at fund manager M&G the 236,000 extra jobs the US added in February will bring the unemployment rate down to 6.5% by the summer of 2014. The 6.5% number is important because that is the level Fed chairman, Ben Bernanke, has made his target before he turns off the money taps. The central bank is currently buying in $85bn (£57bn) of assets a month.

In theory, stock markets that have risen on the back of central bank pump priming will cope with the decline in quantitative easing by switching their focus to the resurgence in growth. Like drug addicts who find their supply lines cut, they will stay happy by mainlining the next best thing – a booming economy based on rising property values and consumer borrowing.

But before criticizing the nature of that US boom, which would appear to be storing up the same problems that led to the sub-prime crisis, we should consider how likely it is that market theory will become market fact.

Fox News, CNBC and Bloomberg TV have spent much of the last four years parading a succession of pundits, analysts and economists who insist that the Federal Reserve's $2trn injection of funds under its quantitative easing policy will eventually create hyper-inflation.

The argument runs that when growth returns, today's pessimist investors will switch to optimists, and far from releasing a steady trickle of private sector funds back into the market, the switch will release a tidal wave. Investment funds that have sat on the sidelines will want to splurge their reserves on all manner of assets. Borrowing will become ridiculously easy again, encouraging consumers to spend on credit.

Surely such a wall of money, which will push demand far in excess of supply, must create inflation?

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