I am sorry to report that the global economic outlook is getting darker by the day. I have been pounding the table about this in my newsletter and in my Forbes magazine columns for some time now. The European debt crisis continues to cause international financial markets to struggle mightily. Investors are still questioning the global banking system.

Here at home, unemployment is still high, job creation slumped badly last month and economic growth continues to be weak. Housing remains in the dumps. Meanwhile, most major stock indices here and abroad were down last year. In the coming months, I expect strapped consumers to pull back on their spending.

One reason why the stock market was able to double from its bear-market lows in 2009 through the early months of 2012 is that the U.S. government and the Federal Reserve were able to act as ‘lenders of last resort’ to big banks and brokerages that would have otherwise gone bust.

Now it's not so clear whether that money spigot will be turning on again anytime soon—and the stock market's decline of late is a clear reaction to this unsettling news.

The implications of these developments are huge and can either bring financial ruin or a chance to make obscene profits. Gary Shilling’s readers cleaned up during the financial crisis and housing crash…click here for Shilling’s new strategy recommendations and investment forecast, available in the latest issue of his Insight newsletter.

As a reader of my Forbes columns, you're probably aware that my investment strategies in recent years have been extremely accurate. Subscribers to my Insight newsletter have profited handsomely by getting bearish on financials and real estate stocks way back in 2007 at the top of the market...and they've continued to rack up gains as we've taken advantage of the market's recovery in select areas—and continued weakness in others.

In the January 2012 edition of my Insight newsletter, I set out my 20 investment themes for 2012. The list is similar to my investment themes for 2011. Why? Because most of last year’s themes worked very well.

The 2007-2009 U.S. recession, the deepest since the 1930s, was the start of worldwide deleveraging, and the severe recession now unfolding in Europe is another important component. Like the U.S. Great Recession, the euro zone slump combines a financial crisis and a goods and services downturn. And it may be more severe in Europe where the euro zone, like the U.S., has a common currency and monetary policy but unlike America, lacks a common fiscal policy to deal with the mess.

This year, I also look for a hard landing in China. In fact, while the world frets over the disaster unfolding in Europe, all eyes should be on China. In my latest newsletter, I detail the worsening symptoms of recession in China. This will have a big impact on your portfolio.

I’m also forecasting a moderate recession in the U.S. as consumers retreat from their recent spending strength that flies in the face of declining real incomes. In sum, I expect a global recession this year.

Gary Shilling was mocked for predicting a housing crash back in 2006, but he and his subscribers cleaned up during the bear market. Click here for Gary's current take on the housing sector in Insight.

Given these forecasts, here are my 20 investment themes for 2012, which you can read about in great detail when you subscribe to my Insight newsletter.

On the favorable side, first up is my all-time favorite, 30-year Treasury bonds. A year ago, I forecasted a drop in the yield on the 30-year Treasury bond from the then 4.4% to 3%. The 3% yield was indeed reached and even breached in late 2011, providing a splendid 33% total return on a 30-year coupon-paying Treasury.

Other areas on the favorable side of my 2012 investment themes include elected income-producing securities; small luxuries; consumer staples and foods; selected health care providers and medical office buildings; rental apartments; productivity enhancers; North American energy producers and the U.S. dollar.

The dollar in the long run is likely to remain the world’s primary international trading and reserve currency because of rapid growth in the U.S. economy and in GDP per capita, promoted by robust productivity growth. Furthermore, the U.S. has the world’s biggest economy and its financial markets are broad, deep and open. There are also no substitutes for the buck in the foreseeable future. And the dollar, despite the recent downgrade of Treasurys by Standard & Poor’s, retains considerable credibility. In addition to these long-run factors, the greenback is the global safe haven in the current worldwide sea of trouble.

On the unfavorable side, my list of 2012 investment themes includes developed country stocks. This is a new theme for 2012 that reflects my forecast of a major recession in the euro zone and the U.K., a hard landing in China and at least a moderate recession in the U.S., all culminating in a turndown in global economic activity accompanied by financial crises of unknown depth. Reinforcing this conviction is my belief that the U.S. and other developed economies are in a secular downswing that started in 2000, which is accompanied by a secular bear market in equities.

Click here to find out how to play the themes of a stronger dollar, low Treasury yields, and a stagnant stock market in Insight

The rest of the unfavorable for 2012 include homebuilders and related companies; consumer lenders; big-ticket consumer discretionary equities; banks; holding residental homes as investments; junk securities; old tech capital equipment producers; developing country bonds and stocks; and selected commodities.

Commodities will probably continue to decline in 2012 as they did last year. The CRB broad commodity index was down 7%. Agricultural commodities such as sugar and cotton fell from their early 2011 peaks and declined for the year as a whole. Corn prices were about flat in 2011, but wheat and soybeans fell. Copper dropped 23%, no doubt anticipating a global decline in industrial production since copper is found in almost every manufactured good, as well as a hard landing in China, which consumes 42% of annual copper production. I doubt that the commodity price decline in 2011 fully anticipated the global recession I foresee this year, so further significant declines are probably in store.

Last fall Gary successfully predicted more problems for the euro zone economy when most analysts thought the worst was behind them. Click here to find out more insights that could help you prepare for a potential second recession.

My investment themes for 2012 are based on my economic, financial and political outlooks for this year as well as on my long-term forecast. After all, this year is just the first step in the long-run journey that will continue to be dominated by The Age of Deleveraging, as discussed in detail in my recent book with that same title. This age, which began in 2007 and probably has another five to seven years to run, is dominated by the unwinding of the immense debt—built up by financial institutions globally starting in the 1970s, by U.S. consumers commencing in the early 1980s and, more recently, by governments as recession-weakened revenues and immense fiscal stimuli hyped their deficits and borrowing.

U.S. real annual GDP growth in future years is likely to be held to 2%, compared to the zero growth since the fourth quarter 2007 business peak and the 3.7% annual growth in the 1982-2000 salad days, thanks to this and eight other forces:

1. U.S. consumers will shift from a 25-year borrowing-and-spending binge to a saving spree. This will spread abroad as American consumers curtail the imports of the goods and services many foreign nations depend on for economic growth.

2. Increased government regulation and involvement in major economies will stifle innovation and reduce efficiency.

3. Low commodity prices will limit spending by commodity-producing lands.

4. Developed countries are moving toward fiscal restraint.

5. Rising protectionism will slow—even eliminate—global growth.

6. The housing market will be weak due to excess inventories and loss of investment appeal.

7. Deflation will curtail spending as buyers anticipate lower prices.

8. State and local governments will contract.

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