Gary Shilling vs. John Tamny (China, Commodities, Stocks, Inflation)

This is a must see macro debate. Gary Shilling (A. Gary Shilling & Co.) and John Tamny (RealClearMarkets / H.C. Wainright Economics) were on Tech Ticker on 2/15/2011. Shilling believes monetary tightening in China, which could overshoot and bring on a hard landing, will cause commodity prices to crash. He believes it will hit industrial and agricultural commodities as "hot leveraged money" finds a safe haven.

John Tamny disagrees. He believes the agricultural moves are "currency driven" since they're all moving at once. (side note: On CNBC the other day, Kyle Bass (Hayman Capital) was worried about Q2 food price inflation globally.

They agree on U.S. stocks. Shilling said U.S. stocks look "frothy" and John Tamny said "I wouldn't be a long term holder of stocks... stocks tend to do best during strong dollar decades during the 80s and 90s". They differ on the inflation vs. deflation debate (third segment).

*Gary Shilling: predicts 3% 30-year Treasury bond yield, stronger dollar (as safe haven, deflation)
*John Tamny: predicts higher Treasury yields, lower dollar, likes gold (sees QE3 as possibility)

Source: Tech Ticker

Source: Tech Ticker

Source: Tech Ticker

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