“I think we’ll be doing it in the decade of the 2020s, because the financing needs are so ugly” as aging populations and declining workforces spur foreign central banks to curtail their purchases of U.S. government debt, Gundlach said. “The bar for them to reverse course is very high.”

Gundlach also sees too much enthusiasm for the U.S. real estate market, saying potential homebuyers younger than 35 aren’t accruing wealth fast enough and foreign buyers seeking tangible assets flooded the market with cash deals.

Demographic pressure will also weigh on China’s expansion, according to Gundlach, with years of a policy restricting families to one child squelching new job market entrants annually to zero from as many as 300 million. That may force China to sell its Treasury holdings, he said. At the same time, the nation’s growth has been slowing.

China Slowing

“China is probably due for a significant negative number in their GDP after all that growth,” Gundlachsaid, drawing a parallel between the country’s expansion and the “hopeful optimism on housing.”

The world’s second-biggest economy grew 7.4 percent last quarter from a year earlier, amid mounting risks from shadow banking and local-government debt. China may only expand 6 percent this year,Gundlach said.

DoubleLine Total Return Bond fund has advanced 5.8 percent annually over the past three years, and beaten 87 percent of rivals in 2014 by climbing 3.3 percent, according to data compiled by Bloomberg.

Gundlach started Los Angeles-based DoubleLine Capital after being ousted as chief investment officer of TCW in December 2009 after a dispute. Since his first mutual fund was opened in April 2010, his firm has attracted almost $50 billion in assets, including $32 billion in the Total Return fund.

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