Tags: Shilling | Bonds | dollar

Shilling: Buy Bonds, Sell Your House and Bank on Dollar

Thursday, 08 Sep 2011 08:15 AM

Investor Gary Shilling advises investors to buy bonds, sell their homes and bet against stocks and commodities.

“We like the 30-year [Treasury],” Shilling told MarketWatch. “You get a lot more bang for buck with a decline in interest rates.”

The dollar may have declined in value, but it's still "the best of a bad lot," says Shilling, and commodities are "not priced for realities."

Investors bent on buying stocks should stick to dividend-payers and operate in sectors that can withstand the worst.

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(Getty Images photo)
Shilling believes U.S. housing prices are likely to lose another 20 percent over the next couple of years because the oversupply of available housing is still huge.

He also expects that official quarterly U.S. growth figures will be soon be revised downward. “The odds are that next time they revise the data it will be to make it even weaker,” Shilling says. “We could be looking at numbers that are positive but may not be six months from now.”

“The Fed and the government are pretty much out of ammunition,” says Shilling. “The Fed has tried the printing press — $1.6 trillion in excess reserves and what’s happened? It’s just sitting there.”

“It’s up to the banks and credit worthy borrowers to turn those reserves into money and they haven’t been. It’s the classic pushing on a string.”

Philly.com reports that borrowing activity is so low that banks have a record $1.5 trillion sitting at the Federal Reserve Bank — eligible for loans if creditworthy borrowers show up and apply.

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Investor Gary Shilling advises investors to buy bonds, sell their homes and bet against stocks and commodities. We like the 30-year [Treasury], Shilling told MarketWatch. You get a lot more bang for buck with a decline in interest rates. The dollar may have declined...
Shilling,Bonds,dollar
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2011-15-08
Thursday, 08 Sep 2011 08:15 AM
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