The credit team at RBS in London are getting very bearish and warning clients to "get ready for the cliff-edge," where prices of stocks and commodities will "collapse."
RBS credit chief Andrew Roberts said the edge is just around the corner for the European banking industry and the economies of Europe and the US.
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"Surely risks associated with us being wrong are low, i.e. rates stay where they are," Roberts wrote in a research note.
"But risks associated with us being right are 10 percent returns in (10-year US Treasurys) and at the same time that equities/commodities will collapse far beyond what even some equity bears anticipate."
As a result Roberts is advising investors to get into maximum long-duration bonds in safe-haven markets.
"This means the US, UK and Germany in that order," he wrote. "Be long gold, think the unthinkable. Get ready for (sub-2-percent yields on two-year Treasurys, sub-2-percent on 10-year bunds) and the UK will not be far behind."
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