Economist Gary Shilling is betting on bonds over stocks in 2013.

“I think you play it with a ‘risk-off’ kind of approach,” he tells Yahoo! Finance’s The Daily Ticker. “And that means you probably look for more appreciation in long-term Treasury bonds, which have been a favorite of mine since 1981.”

Shilling says he doesn’t care that bond yields are exceptionally low. What he cares about is the direction of their yields, and he thinks the direction will be downward. “I’ve only bought Treasuries for appreciation,” he said. “I couldn’t care less what the yield is, as long as it’s going down.” He thinks the 30-year Treasury will fall to 2% and the 10-year note will fall to 1%.

Shilling says stocks are “vulnerable”, with the economy in danger. He thinks a global recession will occur, and he’s worried that profit margins are about as high as they can go. Those factors, and a strong dollar, will hurt U.S. companies’ profits, he says. He also is bearish on housing. “The fundamental problem with housing is still excess inventories,” he said. “In other words, there are too many vacant homes, whether they’re being officially reported in the market or not. We think in total there’s probably 1.9 million extra houses over and above normal working levels, and excess inventories are the mortal enemy of prices.”