Sunday, July 3, 2016

Kyle Bass

Head over to Real Vision and check out the interview with Kyle Bass.  It will blow your mind.

Bloomberg and Business Insider and Zero Hedge have also reported on this compelling interview.  

Takeaway's from the Interview:
  • Japan’s Debt Situation
We all know that Japan will never be able to repay 1.1 Quadrillion Yen of debt given their shrinking population ... absent some exogenous event where they invent cold fusion or something they could change the world with technologically that could pay off their debts.  In a normalized economic scenario, they cannot repay their debts.  
  • The Chinese are going to have to accept a devaluation of the yuan.
  • When the Chinese crisis hits, the Chinese are going to have to react similarly to the way central bankers did after the mortgage crisis.
  • "They're going to expand the PBOC's [People's Bank of China] balance sheet. They're going to slash the reserve requirement. They're going to drop the deposit rate to zero. They're going to do everything the US did in our crisis," he said.
  • And it won't look good. "Every single thing the Chinese central bank has to do is currency negative for them."
  • You better get ready. "In the next two years, this is happening. If you want to pretend that it's not going to happen, you're going to do poorly somewhere in your portfolio."
So what should we do while waiting for the Asia financial melt-down?  Bass recommends investing in Gold and commercial residential real estate (not high end luxury).

Gold Chart
JATSHiLoInflectionsBH Template, Solver:  ST Long

Commentary is opinion only and should not be considered specific investment advice. Futures trading contains substantial risk and is not suitable for every investor. See the full Risk Disclosure on this website.