Redleaf also is worried about the euro's drop in value.
Goldman Sachs recently predicted the common currency would hit 80 U.S. cents by the end of 2017.
"I have no idea, and the bullish consensus on the dollar strike (is) as one-sided as anything I can remember, but it would be quite a remarkable move," Redleaf wrote of that prediction.
That move could mean big trouble.
"It strikes me as completely plausible that a further decline in the euro triggers a recession in the U.S.," Redleaf wrote. "The U.S. has a bear market, high-yield spreads move to 1998 type levels (1,000-1,200 [basis points]), U.S. weakness and market tightening of credit probably make the recession global."
Read MoreWeak euro powers European stocks to new highs
A spokesman for Minneapolis-based Whitebox declined to comment.
The firm was founded by Redleaf in 2000. The bulk of its assets are in private hedge funds, but about $1 billion are in public mutual funds.
The firm's largest hedge fund, Whitebox Multi-Strategy, is up 1.4 percent net of fees this year through January, according to performance figures obtained by CNBC.com. The fund has produced an annualized return of 14 percent net of fees since inception in January 2002.