Ashmore analysts have likened the US Federal Reserve to a virus, which will try its hand at harder medicine after markets ignored chairman Ben Bernanke's verbal guidance in May.
They expect the Fed to attempt to begin tapering of QE - a reduction in the rate of expansion of the monetary base - in early 2014. That comes after the Fed was defeated in an "almighty battle" against bond vigilantes early this year.
Bond markets ignored the Fed's verbal guidance, and have priced in nine rate hikes by the third quarter of 2016.
Ashmore say that without Fed purchases of US Treasuries, rates could easily go up. The Fed was the only net buyer of Treasuries in the second quarter of 2013.
Without QE the Fed will be faced with an uncomfortable choice between austerity, and dollar depreciating inflation. The latter is likely to be far more appealing to voters - as it will hit future generations and non-US citizens.
Ashmore's head of research, Jan Dehn, says that the root of the US economy's problems are its 405 per cent of GDP debt burden (that number includes 300 per cent of GDP worth of unfunded entitlements).