Kyle Bass On ¥1 Quadrillion in Debt: The Japanese Zone of Insolvency-They’re Finished!

Kyle Bass JapanFor those unable to attend the Initiative on Global Markets conference in March, legendary fund manager Kyle Bass gave a shocking and eye-opening 48 minute presentation on Japanese debt, and how the ¥ will be the first currency to crash and burn in the rapidly escalating global currency war:  

The Japanese interest expenditure is nearly ¥11 Trillion.  To put that in perspective, their tax revenues are ¥43 Trillion.  Japan is spending 1/4 of their tax revenue on interest alone today, with interest rates at zero (5 year bonds are at 17 basis points). 
This is the zone of insolvency!  There is no looking back!  If Abe and Kuroda really achieve some sort of inflationary outcome, and the swaps move, they’re finished.  Every 100 basis point move in cost of capital costs Japan ¥11 Trillion.  A 200 basis point move has their debt service exceeding central government tax revenue! Those wishing for inflation do not know what they wish for!

Bass’ full MUST, MUST WATCH presentation on Japanese & global debt markets is below:


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We suspect Bass’ call is rather prescient, particularly as Japan recently passed the ¥ 1 Quadrillion mark in official debt- roughly 25 X the official Japanese GDP.

 

Comments

  1. So many breaking news recently. Somehow, I am excited. LETS DO THIS!!

  2. I thought this was posted here already when it happened (the video anyways). Either way, put it in the pile with the rest of the news that should be good for metals LMAO! The only question is, when does war break out.

  3. Kyle Bass is one of the sharpest money managers out there today.  His call on shorting the yen was excellent.  The YCS fund was up almost 7% today.  The tricky part will be in trying to figure when to sell it and convert the profits into phyzz.  :-)
     

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