Doug Casey: Forecasting another meltdown.

Casey Research bases the forecast on this:

The Bond Market is twice the size of the Stock Market. Therefore, the Bond Market is perhaps a better predictor of economic expectation.

This is how it works. When investors expect an economic turndown they demand a higher return on  bonds that are issued by less secure entities.  These bonds are called 'junk bonds.' No mystery why this happens: less secure entities go out of business during turndowns. However, govt bonds do not have to increase interest as much  because Uncle Sam has a lot of staying power. So, those issuing junk bonds must promise a higher return because of the higher risk. The spread between junk bonds and govt bonds (i.e. the difference in rates paid by issuers), therefore, becomes a reflection of what investors anticipate.

The spread increased in 2007 and is increasing now.