Economist Gary Shilling says if the U.S. economy isn’t already in a recession, it is getting very close.

“My view is that our nervous markets are anticipating this global recession,” Shilling wrote in Forbes magazine.

“Most stock markets around the world have largely erased their earlier 2012 gains in anticipation of further economic weakness and a collapse in corporate profits,” he noted.

Early this year, Shilling predicted the S&P 500 index would fall to 800 on weak corporate earnings.

“It hasn’t happened yet, and the figure has been scoffed at,” he said. “But disbelief is exactly how people reacted when I predicted the housing bubble’s burst … in early 2005.”

The rally in Treasury bonds is all about finding a safe haven, Shilling added.

“It is symptomatic of the unfolding global recession and gathering evidence of deflation,” he wrote. “My three-decade favorite — 30-year Treasury bonds — recently achieved my target of 2.5 percent.”

Nevertheless, long Treasurys and the U.S. dollar are still buys.

Shilling expects singe-family housing prices to fall another 20 percent because of excess inventories and believes the Federal Reserve is “out of bullets” and the decade-long, China fueled commodity bubble is over.

“The economies and financial markets of the world are in the midst of a massive deleveraging, and I believe it will take another five to seven years to return debt levels to their norm,” he stated.

“While there may be occasional rays of sunshine, don’t get your hopes up for a cloudless sky anytime soon, especially as a global recession looms,” Shilling said.

According to the Fed’s Beige Book, although growth and hiring slowed in several parts of the country in June and early July, the U.S. economy expanded modestly, The Associated Press reported.

Three of the Fed’s 12 banking districts — New York, Philadelphia and Cleveland — reported weaker growth, while Richmond said economic activity was mixed. The previous Beige Book reported that growth had expanded or held steady in 11 districts from mid-April through May, according to the AP.

All 12 districts reported gains in housing, even though hiring was “tepid” in most districts, retail sales slowed in Boston, Cleveland and New York and manufacturing weakened in most regions.

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