Former Merrill Lynch chief economist for North America David Rosenberg said this morning that the price of gold would peak before the end of the cycle at above $3,000 an ounce.

Speaking this morning at John Mauldin’s Strategic Investment Conference, Rosenberg, a widely followed, Toronto-based contrarian, told attendees that he thought long-term U.S. Treasurys were a good investment. He also argued that inflation concerns enunciated by the Federal Reserve and accepted by many market participants were exaggerated and that a recession could be next year’s story.

Rosenberg urged investors at the event to read the Fed’s own Beige Book and listen to key players in the economy more closely than the monthly economic statistics churned out by government agencies. He cited Walmart CFO John D. Rainey, who recently said pricing is not going to provide the “same uplift” for pricing that it did over the last year.

Inflation has only fallen this fast five times in the last 70 years, Rosenberg said. At present, inflation is only a problem in three areas of the U.S. economy—auto insurance, energy and healthcare.

Moreover, firms’ ability to pass on cost increases is declining, he said. If the Bureau of Labor Statistics were to adopt the same methodology of inflation measurement that Europe uses, U.S. inflation “would be below [the Fed’s] target.”

This is one reason why a recession has been “delayed, not derailed,” he said. He added that in the three circumstances when the Fed managed to engineer a soft landing, the central bank stopped tightening when the yield curve flattened.

The typical recession happens 26 months after the Fed’s first rate hike. This time they continued to tighten interest rates.

“I still think the clock is ticking” on this cycle, Rosenberg said.

Rosenberg acknowledged that his perspective was unpopular with many investors entranced with the equity market. But markets are becoming distorted and something is likely to give at some point, he said.

Take the equity risk premium, he said, a metric that sophisticated academics use to justify stock prices. To get an equity risk premium that works in sync with other asset prices will require much lower Treasury yields, he maintained. “If you love the equity market, you’d have to adore the Treasury market,” Rosenberg told attendees.

As for his prediction for $3,000 an ounce gold, Rosenberg did not elaborate except to say that gold supplies were tightening and mining costs were rising.