Gary Shilling: Home Prices to Fall 20%, Likes 30y Bond and Cash (Sees Decade of Slow Growth and Deflation)

Gary Shilling, who runs research firm A. Gary Shilling & Co., was featured on a Bloomberg Podcast on 10/14/2010. He's still in the deflation camp and believes home prices will fall by another 20% to revert back to the long term trend. 30 Year Treasuries are still his favorite investment and have been for 29 years. He has a new book coming out next month titled: "The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation". So you know where he stands. Shilling believes gold is rising on "the rejection of paper currencies" not because of inflation. It's interesting that he doesn't care about the recent price moves in agricultural commodities (corn, cotton). Maybe food spikes will be the next "$147 oil" catalyst that brings on the next crash in risk assets.

In his portfolio, Shilling said he's heavily weighted in cash and 30-year Treasury bonds (sees the 30y bond yield at 3% and 10y-note yield at 2%) and remains "suspicious" on stocks and commodities. $TLT (20+ Treasuries ETF) better hold $100 and the 50DMA btw. For more, listen to the whole 10 minute podcast here (via Bloomberg Radio).

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