May 30, 2012

Kyle Bass: Japan will follow Europe's nightmare of debt crisis

Bank of Japan actually monetize the debt of the country by buying local government, said hedge fund manager

Japan is about to follow Europe into the abyss of debt crisis, said Kyle Bass, a hedge fund manager and founder of Heyman Capital, said on CNBC.

Although investors are focused on the situation in Greece and other European countries, Japan will soon remind myself, says Bass

"Things in Greece will get out of control in the next 30 to 60 days," said the investor, became famous for their large short positions in subprime mortgage bonds before the collapse of the sector in 2007-2008

"Japan is a market crossroads ... I've never seen more undervalued opportunity in our lifetime, "he says.

Bank of Japan actually monetize the debt of the country by buying Japanese government 50 trillion. yen, Bass argues.

There are many dangers associated with strategies of central banks trying to print his escape from the debt crisis. These are inflation and loss of confidence in the stability of the debt, says Bass.

According to the approaching crisis is obvious. "The simple fact is that there is not an exercise in infusing liquidity. The question is when, not whether the system will collapse. "

Japan's aging population and the burden of system benefits, are the main factors resulting from debt problems.

Bass illustrates the words as an exemplar convicted for financial fraud Bernie Madoff fund manager. "He taught us anything," says Bass. "You can promise anything and everything as long as you do not have to do them."

As for Europe, Bass rejects the idea that Greece may adhere to contractual agreements. "Bankruptcy would not be controlled and eventually they will have to abandon their promises to the Troika," he said, referring to the European Union (EU), International Monetary Fund (IMF) and European Central Bank (ECB).

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.