The euro will fall another 25 percent against the dollar, meaning a euro will be worth close to one U.S. dollar, says economist Gary Shilling.

The euro recently traded at about $1.3445.

And what will spur the move? While the U.S. economy may have some problems, it’s a lot better off than Europe, he says.

“We’re the best of the bad lot,” Shilling says. “Whatever happens, I think the U.S. will continue to be the safe haven in terms of the dollar and in terms of Treasuries.”

Indeed, he told Bloomberg he sees the 30-year Treasury yield dropping to 3 percent from 4.6 percent currently.

“In our portfolio, we are long the dollar against the euro, and we’re long 30-year bonds,” he says. Shilling likes 30-year Treasuries over the 10-year bond.

“You get the most bang for your buck (with 30-year issues) when rates go down,” he explains. The rate drop he forecasts would produce a 32 percent return, he says.

Shilling is less enthusiastic about stocks because he sees the economy facing significant headwinds.

First, the housing sector still faces a huge supply overhang that will push prices down further, he says. In addition, consumers aren’t spending, and unemployment remains a drag.

Investment guru Marc Faber has a vastly different view of the Treasury bond market.

He thinks prices will collapse, sending yields up to a range of 10 to 20 percent over the next five to 10 years, as inflation and supply explode.

"I still think that Treasuries are overpriced," Faber told CNBC.