SAN LUIS OBISPO, Calif. (MarketWatch) — 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%.”

Ben S. Bernanke, chairman of the U.S. Federal Reserve. Getty Images

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.”

Here’s why you better be preparing today for a crash dead ahead. As Pimco’s Bill Gross warned in his recent newsletter: “You’re going to lose money investing ... because the central banks say so.” That’s right, this is a Fed-driven rally. Soon the Fed will be forced to stop printing cheap money.

No spending spree; Obama’s new Fed Chair has to raise rates

Here’s the alternative “Dr. Doom’s August scenario:” Aging bull market. Fifth year. Markets at risk. Down soon. August. Will Obama reappoint Bernanke again? No way. But who? New blood? Shake things up with Wall Street mastermind Mayor Michael Bloomberg? After more than two decades of Greenspan/Bernanke’s misguided, destructive monetary policies, America could use a guy like him at this crucial turning point.

But expect a safe bet. Obama favors a woman. The high rollers are already betting on Janet Yellen, vice chairman of the Fed, long-time monetary insider. Former San Francisco Federal Reserve Bank CEO. Also chairman of Clinton’s Council of Economic Advisers.

But watch out, even a sure bet can misjudge hidden dangers lurking ahead of a Titanic like the $15 trillion U.S. economy. As the Wall Street Journal’s Matt Wirz wrote in March:

The Fed “won’t be able to keep a lid on interest rates forever.” So “large money managers such as BlackRock, TCW Group and Pimco are getting ready for the day when rates take their first turn higher. It isn’t coming anytime soon, these investors say. But when it does, they worry, the ascent will be swift and steep.”

Get defensive now, start preparing for a crash ... later is too late

Get it? Rates will go up. Way up. Very fast. And America’s 95 million Main Street investors will be unprepared. Markets will crash. Like 1994’s 24% bond crash after Fed rate increases, notes Wirz.

The big players say the crash “won’t happen soon.” Don’t believe them. They’re betting with trillions. And they are hedging their bets, already preparing for “when rates take their first turn higher,” because rates will soar “swift and steep,” and when that happens it will be too late to prepare.

“Dr. Doom,” the economist Nouriel Roubini is also hedging his bet, misleading investors, telling us to expect a “huge rally in risky assets” the next couple years “setting markets up for a major sell-off.”

Warning, a crash is more likely to happen in August 2013 than in 2015 when the next presidential election campaign is kicking into high gear. So start preparing for a crash when the new Fed chairman ends cheap money.

Why target August for rate increases ... and a crash?

Why an August trigger? Here’s the logic: Obama reappointed Bernanke in August 2009. He’s predictable. August is quiet. Earnings season over. Congress on vacation, not that they haven’t been on vacation for a while. Wall Street will be sunning on Fire Island and Nantucket.

So August is a good time to sneak in an appointment. True, Bush first appointed Bernanke in October back in 2005, but that was a different time zone.

More important than the timing is what happens after Obama broadcasts his choice of a new Fed chairman. We got a big clue: A couple years ago the New York Times noted that Yellen had a major role at the Fed to provide “forward guidance” about monetary policy, several years ahead, while “persuading investors that it is safe to accept lower interest rates.”

Yet when asked, Yellen was clear: “When the time has come, am I going to support raising interest rates? You bet.” Well, the times are a-coming.

After years of GOP Fed chairmen, new chairman will be forced to raise rates

So what’s even more predictable, after a Yellen announcement pundits will flood the news media with dire predictions of rate increases dampening the economic recovery. Why? For one thing, everyone knows they can’t stay at rock-bottom, dirt-cheap, give-away prices that help banks but are killing the rest of America.

As hedge fund manager Daniel Arbess put it succinctly in a recent Wall Street Journal op-ed piece: “Monetary impotence plus fiscal paralysis equals an inadequate recovery ... Stock markets have recovered all of the $10 trillion lost in the recession, but homeowners are still $5 trillion underwater.”

Arbess cites “the Pew Research Center, the highest-earning 7% of the population saw their net worth grow by 28% between 2009 and 2011, while overall the net worth of the remaining 93% of Americans dropped by 4%.” The Super Rich won big. Main Street suffered most.

More proof? In another Journal op-ed, Martin Feldstein, former chairman of Ronald Reagan’s Council of Economic Advisor, said Bernanke’s QE policies are a “dead end ... the program has done little to raise economic growth while saddling the Fed with an enormous balance sheet.”

So Bernanke knows rates must rise “swift and steep.” But most likely he’s hoping America’s weak recovery will hang on till his term ends, preserving his legacy till he gets an $11 million book deal, topping Greenspan.

Three endings: Short bull ends, Bernanke ends, 30-year bond bull ends

In March 2009 my column headline read: “6 reasons I’m calling a bottom and a new bull.” The Dow crashed from 14,164. Hit rock bottom at 6,547. Wall Street lost over $10 trillion of America’s retirement money. Your money. And the stock market did recover more than 100% since. But now the long-term trend’s reversing: Now I’m calling a top to this Fed-driven bull.

So America’s facing three historical endings: The bull that started March 2009, the Fed’s cheap-money policies and the 30-year bull market in bonds.

And Pimco’s Bill Gross also agrees with Grantham’s long-term macro prediction over on InvestmentNews: “Bond investors should be expecting 2% to 3% returns over the future years ... lower than expected, but ... still better than cash and will provide positive returns.” Moreover, “a big spike in interest rates ... wouldn’t be friendly for stocks, either.” Yes, big drop for both.

Yes, 3% annual GDP growth is gone forever. Are you prepared?

Grantham warns that from the late 1900s until the early 1980s “the trend for U.S. GDP growth was up ... remarkable ... 3.4% a year for a full hundred years,” powering the American Dream. But after 1980, under Reaganomics and the new conservative capitalism, “the trend began to slip,” warns Grantham.

Yes, after a century of high-growth prosperity, our GDP growth dropped “by over 1.5% from its peak in the 1960s and nearly 1% from the average of the last 30 years.”

And looking ahead at long-term macro-trends: “The U.S. GDP growth rate that we have become accustomed to for over a hundred years” is “not going back to the glory days of the U.S. GDP growth,” no matter how much wishful thinking the media quotes from in-house economists at UBS and Wall Street banks, “it is gone forever.”

Bottom line: America is deep in denial. And it’s killing our GDP. A new blinding “irrational enthusiasm” times 10. We are again in denial about our accelerating GDP decline. Grantham put it this way: “Most business people (and the Fed) assume that economic growth will recover to its old rates,” as do bank economists like UBS’s Harris.

But looking ahead to 2050, Grantham warns: “GDP growth (conventionally measured) for the U.S. is likely to be about only 1.4% a year, and adjusted growth about 0.9%.” Get it? The American economy is on a long-term decline.

But as InvestmentNews warned in their earlier in its “Special Report: Tick, Tick ... Boom!” millions of investors have “no idea what’s about to happen to them.” We’re in denial, clueless and as Gross puts it, “You’re going to lose.”