Wednesday, March 13, 2013

Kyle Bass On Japan & The Best Investment You Can Purchase Today

Kyle Bass took the time to speak at the Myron Scholes Global Markets forum last week in Chicago. The embed link is not available, so I cannot post it here, but you can hear its entirety by following this link:

Kyle Bass Speaks In Chicago

Kyle discusses much of what you have heard and read here over the past few months. For a written and visual primer on the coming collapse in Japan please see:

2013 Outlook: Japan's Government Debt Bomb Goes Off

In the discussion he moves further beyond his normal scope (because he is speaking to a higher level financial  group), and he even goes into some detail on his current trade against Japan. He describes it as almost the same exact trade he put on in subprime in 2006 where he bought protection against the debt in the derivatives market (becoming a billionaire household name). He goes on to say that if Japan stays at a flat line some young kid working at a bank gets a bonus check on the year. If Japan rates move just a little then that young kid that sold him the debt blows up the bank. This is exactly what happened in 2008.

He says that some of these banks are now calling him and asking him to close his position, just as they did in 2007, as more and more people realize what is coming in Japan.

The number one investment the average person around the world can make today? He would buy gold in Japanese Yen and go to sleep for ten years. "You can wake up 10 years later and be okay."

Once the understanding of a real (impossible to bailout) government debt collapse sets in to the mindset of Japanese citizens you will see a rush to gold in the country that will be just incredible. Those that have just a small amount of foresight will be able to extrapolate forward and see that the balance sheet of the United States is also insolvent. Some of the strongest investors, such as Kyle Bass, have looked down this path and are already buying gold today ahead of the world wide rush.

He notes that you will never get a signal that this trouble is coming from the government. The Mexican government made a public statement that they would never devalue their currency the night before they devalued their currency by 60%.


  1. I know you don't give investment advice but its hard to find information from good sources about different ways to play the pending problems in Japan. Can you do a post outlining the different ways the average investor can try to profit from this situation please, great job with the postings very informative. Thanks

    1. Thanks for the kind words. I have provided a complete response with a full article:

    2. Hey look into JGBS or JGBD (JGBD has 3x leverage)

    3. Do NOT use leveraged ETFs for medium/long term fundamentals based positions, EVER! Leveraged ETFs are for DAYTRADING only. Read the prospectuses of the leveraged ETFs, where it says the same thing in big fat letters. Few people seem to be aware of this. The reason is that a leveraged ETF only aims to reflect the amplified daily movement of the underlying, not the long term price. With a leveraged ETF, even if the long term price of the underlying moves in your favour, you can still lose, if the path is volatile.

      Only use unleveraged ETFs for medium/long term positioning. Just buy/sell more if you want to increase your exposure.