After spending the last few weeks traveling around America, DoubleLine CEO Jeffrey Gundlach saw one economic trend that was pervasive. Signing bonuses appeared attached to Help Wanted signs across the land.

These were among the most noticeable “distortions brought on by the lockdown and stimulus,” Gundlach said on a webcast yesterday. He wondered whether it might be possible for aspiring workers to collect multiple signing bonuses this summer hopping to different jobs from one desperate employer to the next.

GDP is booming as the nation emerges from lockdown. With inflation acceleration, Gundlach said some economists are projecting nominal GDP growth of 10.4% this year.

But Gundlach questioned the cost of multiple stimulus bills and their ramifications. Deficit spending, he noted, is running at about 16.2%, a level not seen since World War II. Factoring in all spending measures, including some omitted from official government calculations, the real number exceeds 20%, he said.

Could stimulus be extended yet again, he asked. The true picture of a stimulus-free economy is not a pretty one. “If we took the deficit to zero, GDP growth would be minus 10%,” he said. Government continues to spend 35% to 40% of total GDP, he estimates. That’s a level approaching public sector-heavy European economies.

Even as unfilled new job openings set new records, Americans collectively are rolling in the stimulus bucks, in his view. Loan-to-deposit ratios “have collapsed” largely because bank deposits have soared.

China’s economy is a major beneficiary, Gundlach added. That’s because a lot of spending “has gone to goods from China imported by Amazon.” The trade deficit, which tumbled from 6% to 2% following the Great Financial Crisis, “appears” to be the widest since 1997.

When it comes to inflation, consumer expectations are critical and many Americans are concerned. DoubleLine’s model shows inflation running in the high 4% area, while other models have it exceeding 5%.

The strong cash positions of consumers raise the prospect of the runaway inflation seen in the Jimmy Carter era, when people rushed to buy goods in anticipation their prices would be much higher in a year, Gundlach said. Officials at the Fed have said they expect inflation to be “transitory,” but “no one knows,” he said.

Official government figures understate inflation because of the “contrived” way they measure shelter prices, he said. If they were to replace their methodology with actual housing prices, the Consumer Price Index would be running at about 8.8%, not the stated 4.2% level.

In some areas, home inventories are virtually “non-existent,” Gundlach said. Moreover, there are now 10 times real estate agents than homes for sale in some regions.

Food price inflation could “drive social unrest” since it puts pressure on people at the lowest end of the income ladder, he said. Other price trends are likely to be temporary.

Used car prices, for example, have “practically doubled” in the last year. After recently shopping for a truck, he discovered the prices for these used vehicles were almost identical to new ones. “That’s not sustainable,” he said.

All these crosscurrents leave Gundlach “very negative” on the U.S. dollar. When one combines the trade and federal budget deficits, the twin shortfalls top 20% of GDP, or more than double “what used to be considered a bad level.” These are among the factors that suggest the dollar could fall 20% or more against a basket of currencies.

When it comes to the stock market, Gundlach noted that the ratio of U.S. equities versus the rest of the world has stopped climbing after a decade of American outperformance. If the dollar starts “falling in earnest,” that ratio could follow.

That’s one reason why he turned bullish on European stocks for the first time since founding DoubleLine in 2010. Europe and the rest of the world have not enjoyed the massive level of stimulus that America has.

This raises the possibility that the U.S. economy could experience “a significant reversal” when certain unemployment benefits and income transfer programs expire. In other nations where stimulus programs have been smaller, the potential threat isn’t as great.

Right now, the strength of retail investors is “completely off the charts,” Gundlach said. Asset flows from global investors into both developed and emerging markets has been “massive.”

The same is true for commodities, where some price charts have gone “vertical,” Gundlach said, adding that prices for some commodities could be due for a pullback. Lumber, for example, which soared five-fold, recently experienced a 25% price decline.

Gundlach added that he doesn’t really have a short-term view on gold but he expects it to go much higher over the long term.