Ace independent economist Gary Shilling warns that the sluggish U.S. expansion combined with economic troubles overseas could lead to deflation.

In an interview with Forbes, he says the economy’s slow recovery will spark a major rally in Treasurys pushing the 10-year Treasury bond yield down to 2 percent. And he said commodities are definitely a bubble.

In the U.S., GDP has grown only 3.7 percent in the first five quarters following the recession, Shilling notes.

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“That ranks with the lowest post-recession expansions we’ve had and after a recession which was the most severe since the 1930s, you would expect normally a much bigger balance.”

So he sees 10-year Treasury yields ultimately falling to 2 percent from about 3.73 percent currently.

“That is predicated on the idea that we’ve got slow growth, that we’re going to continue to have a lot of problems in Europe, maybe hard landing in China, which will, as usual, create a zeal for the dollar and for Treasurys as safe havens. And we may even have deflation.”

As for commodities, they’re definitely a bubble, Shilling says. “I think if China does have a hard landing, we’ll see the commodity bubble prick.”

Other experts are bearish on Treasurys for now.

After a weak Treasury auction Tuesday, George Goncalves, head of interest rate strategy at Nomura Securities, told the Financial Times, “Today’s referendum on investor support for the Treasury market seems to have fallen flat, with real money buyers sidelined despite noticeably juicier yield levels.”

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