Seeking Alpha

Though expecting a Chinese hard landing and a 2012 recession, Gary Shilling remains positive on...

Though expecting a Chinese hard landing and a 2012 recession, Gary Shilling remains positive on U.S. Treasuries, due to his view of the American economy as "the best of a bad lot." Shilling expects 30-year yields, currently at 4.2%, to eventually drop to 3%. Meanwhile, Shilling is bearish on equities and "agnostic" on gold.
Comments (2)
  • Dear Ed: I'm not sure why you say begin the sentence with "Though." One would normally expect Treasuries to do well during tough economic times in the U.S. and China.
    14 Jul 2011, 11:12 AM Reply Like
  • They could do well due to a flight to safety, which I think is what Shilling's counting on. But they could also fall due to the Chinese government cutting back its Treasury purchases, or perhaps even selling some of its current holdings to finance stimulus programs. They could also fall due to a U.S. recession producing larger deficits (which in turn leads the Treasury to issue more debt).
    14 Jul 2011, 11:54 AM Reply Like
DJIA (DIA) S&P 500 (SPY)