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Gary Shilling hasn't been sounding too upbeat about the U.S. economy, consistently taking a bearish view on the recovery – if you can call it that – throughout 2011. For 2012, he's just as gloomy, and his concerns are global: Hard landing in China? Check. Deep recession in Europe? Check. Moderate recession in the United States? Check.

"In sum, we expect a global recession this year," he said in his monthly report, arguing that this is part of the longer-term deleveraging process.

You might think this sort of outlook would add up to preciously few investment ideas, but Mr. Shilling – an economist who heads A. Gary Shilling & Co. – has some.

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Here's his biggest idea: Buy U.S. Treasury bonds. This call might sound familiar. After all, Mr. Shilling has been bullish on bonds for three decades. His rationale now: Slow economic growth, Federal Reserve determination to reduce long-term interest rates, the threat of deflation and the attractiveness of bonds as haven investments.

"A year ago, we forecast a drop in the yield on the 30-year Treasury bond from the then-4.4 per cent to 3 per cent," he said in his note. "The 3 per cent yield was indeed reached and even breached in late 2011, providing a splendid 33 per cent total return on a 30-year coupon-paying Treasury.

"We're now predicting a further decline to 2.5 per cent, the low reached at the end of 2008 after Lehman's bankruptcy, because of the similar financial crises in Europe today and the possible spillover to the U.S."

If he's right, he sees a 10 per cent total return this year. Meanwhile, he sees the yield on the 10-year bond falling to 1.5 per cent, producing a total return of 5.2 per cent this year.

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