The last 10 to 15 years will play out in reverse. Emerging markets may have recovered off their lows for the summer, but Richard Bernstein of the eponymous asset management firm believes they could continue to disappoint investors. Speaking today at a meeting sponsored by Eaton Vance (for which he sub-advises two mutual funds), Bernstein reiterated his longstanding belief that the U.S. is in one of the best bull markets of most investors’ lifetimes.

Earnings of U.S. companies are now rising at a faster clip than their emerging market counterparts and inflation is fast becoming a problem for many developing economies. In some nations, food inflation is rising at a 18 percent rate.

“If you are living high on the hog, you are not rioting in the streets,” said Bernstein, referring to several nations which have experienced food riots. “[Emerging markets] analysts refuse to admit there is something troubling happening.” In reality, these economies are confronting both cyclical and structural problems.

Immediately after the financial crisis, many emerging markets had fewer debt problems and recovered faster, but that has changed. Consumer credit has soared in many of these nations, such as Brazil, and now threatens their growth rate.

“Emerging markets were the super play” on the global credit crisis in 2009, but that trade is long since over, said Bernstein, who spent two decades as Wall Street’s top-rated market strategist at Merrill Lynch before starting his own firm in 2009.

“Emerging markets will slow down” and some will contract, he said. “It will be very bad for commodities. Investors in emerging markets should demand a huge risk premium, given the quality of assets on the balance sheets.”

In sharp contrast, Bernstein remains bullish on U.S. equities, despite the fact that stocks have climbed 160 percent since March 2009 and 24 percent this year alone. U.S. equities probably could rise another 10% in 2014, he predicted.

Bernstein's favorite sectors are small- and mid-cap industrial and manufacturing companies that do most of their business in the U.S.. The problem he sees with large-cap industrial manufacturers is that they are looking to emerging markets for their growth.

America is in a mid-cycle environment where there is a tug of war between an improving economy and the fear of rising interest rates. Bernstein’s guess is that the Fed will be extraordinarily slow when it comes to starting the so-called taper.