Gary Shilling is Sticking to His Forecast of a 3% Yield on 30 Year Treasuries

By on August 9, 2011

Gary Shilling, president of A. Gary Shilling & Co., has been prescient in his forecast for the bond market this year.  He was on Bloomberg this morning and reiterated his call for a 3 percent yield on long U. S. Treasury bonds (currently around 3.6%).  He considers Treasuries the safest place to put money saying, “we’re the best of a bad lot.”  Shilling commented on what could trigger a recession.

Shilling indicated there would be convergence of factors leading to the economy falling into recession.  He sees the U. S. consumer re-trenching which will hurt countries that are net exporters.  China will need to generate domestic demand which he considers a 10 year project.

Shilling said the attempts of the Fed and government to stimulate demand were not working.

Although he has been on the right side of the market, Shilling admitted recent market activity has been scary stating, “nobody likes to see chaos…even me.”


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