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Kyle Bass - Japan's Debt Time Bomb

January 18, 2013 | About:

Interestingly, Bass thinks the collapse of Japan has been moved forward with the new government's plan to kick start inflation:

- Japan's debt is 24 times its tax revenue; it doesn't matter what they do, their fate is sealed.

- Japan's relation policy is going to do nothing but expedite the collapse.

- At current rates, the only reason anyone would own Japanese government bonds is because you think there is going to be deflation. If they created inflation there will be a mass exodus from the bonds triggering rising interest rates which Japan can't handle.

- He thinks we are right on the cusp of the collapse for Japan.

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Rating: 3.0/5 (2 votes)


Aldandrea - 4 years ago    Report SPAM
It is fascinating that there is often little or no response when a well respected investor like Kyle Bass predicts that the sky is about to fall. Respected investors around the world are increasingly predicting that very, very bad things are going to soon result from the massive money printing operations that have been -- and continue to be -- conducted by US, European, Japanese and Chinese govts. Zerohedge.com has one article after the other about the coming debacle and this month's Atlantic Monthly has a good article on U.S. banks that makes you wonder if anything at all has really changed since 2008. We have become so used to the can being kicked down the road "successfully" that most will be surprised when a coming kick causes the can to explode. With no end in sight to the U.S. govt. propping up the economy with massive money printing, it hard to see the U.S. stock market as not having significant downside risk. Hedge fund manager Hugh Hendry has been saying for several years that many major Japanese corporations are virtually bankrupt because of the huge amount of debt they have taken on at artificially low interest rates. That a small uptick in Japanese rates -- which will soon be upon us if Kyle Bass is correct -- will cause massive debt defaults and bankruptcies in Japan. I have read that, in the U.S., if interest rates go to 2.5%, govt. debt will lose 23% of value, essentially wiping out whatever equity Uncle Sam has. The economic problems have been irresponsibly pushed off for so long and have now grown so large that govts and politicians around the world must be scared out of their wits and have no earthly idea of what to do next. It makes me wonder how Warren Buffett always concludes that things are not so bad.

Does anyone else have thoughts on all of this?
Superguru - 4 years ago    Report SPAM
"it is fascinating that there is often little or no response when a well respected investor like Kyle Bass predicts that the sky is about to fall"

If it does crash, it will be the buying opportunity of the 5 years. (in investment world, Sky falls somewhere every 5 years or so anyway.)

also how many of us are really invested in Japanese bonds, for us to be affected by it.

Btw, skyfall is the first Bond movie I really liked.

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