Now: Debt unsustainability in Japan and Europe. Next … ?
Kyle Bass made headlines last year when he talked about making money out of financial crises—especially in Japan and Europe. (As if making money for your clients when there’s blood in the street is a bad thing.). Things haven’t quite hit the skids yet, but he’s positioned when they do.
Japan is the next in line to face a sovereign debt crisis, says Bass, and very soon the markets’ focus will turn on it. He expects monetary deflation that will lead to a correction in equity prices because such economic shock will spread to the world economy .. leading to a stock market correction of 40-50%….
He mentions that Japan is next after Europe … and it depends on Japan and Europe, how long time USA has until a debt crisis. In his opinion it is 3-5 years away.
Here are his thoughts (from late last year) on the reason for the crisis: the total unsustainability of government debt in Europe and Japan. Japan, he argues, “is the most complex spring-loaded situation in history.”