5 Money Moves Gary Shilling Is Making Now Forecasting Recession, Bearish Economist Says Buy Bonds, Bank On U.S. Dollar

http://www.marketwatch.com/story/5-money-moves-one-recession-forecaster-is-making-2011-08-05?siteid=yhoof2

1. Buy Treasury bonds

2. Bank on the U.S. dollar

3. Bet against commodities

4. Bet against stocks

5. Sell your house

What’s changed, Shilling added, is that “the guys at the top” have been affected. “A lot of the people on the top that dominate the security markets talked about a ‘soft patch’” for the economy,” Shilling said. “To them, this was all temporary.”

Now, he said, “the areas that made people all this money and gave them confidence that all this was a soft spot have gone against them.”

The tide has turned, and markets are only beginning to realize it, Shilling points out. As more investors come to terms with this new era of debt-shedding and frugality, money will flow to investments -— mostly defensive ones — that can benefit. It won’t be a pretty transition, but, Shilling said, “There isn’t much you can really do. You just have to wait for this whole thing to work itself out.”