The bears are coming, and Kyle Bass is preparing America. On a recent episode of Half Time, Bass pointed out that in Europe, banks lent in excess of their Gross Domestic Product, and as a result facilitated economic declination. He points out that in China, the exact same thing is happening. Currently the Chinese banks have the country on the hook for some thirty-five trillion dollars, as measured in U.S. currency. The thing is, China’s annual GDP is only ten trillion dollars, which means she’s in the hole for 3.5 times her net worth.
Most every country surrounding China has some stake in her economy–at least as far as lending and investments are concerned. According to Bass, those surrounding countries have been “Lending Aggressively” to China, and the result will be an economic collapse when the bubble bursts. The collapse will extend to those countries that have aggressively lent to China, and by proxy to the United States. Currently America has substantial financial ties to China’s economy, and should the bubble burst in 2016 as Bass predicts, America’s economy stands to diminish between ten and twenty percent.
Bass is an Argentine who manages hedge funds in Texas. Bass became prominent on the national financial scene when he accurately predicted the banking crisis which emanated from sub-prime loans being meted out throughout America prior 2008. He understood those loans were built on nothing, and would eventually implode, and so he bet against the banks and won.
Bass has also been able to legally manipulate the United States stock market through his organization, “The Coalition for Affordable Drugs”, or CAD. Something that a lot of reporters, UsefulStooges included, see as more than a little shady. CAD was able to diminish the cost of several big-ticket pharmaceutical companies’ medication. This led to a decline in their stock value, on which Bass quickly capitalized, making a pretty penny and prompting politicians into bipartisanship as they scrambled to close the loophole he’d exploited. As yet they haven’t been able to in America, and Bass has other legal stock-market manipulation schemes built around the pharmaceutical industry up his sleeve.
Bass also predicted an economic crisis in Japan which resulted in the country having to mete out stimulus packages.
Finally, Bass is connected to Cristina Fernandez de Kirchner, a well known socialist who currently presides over Argentina. What this means in regard to Bass’ financial endeavors is anyone’s guess, but it’s certainly indicative of something.
Bass has made successful predictions before on his blog, and if he’s right about China, it makes sense for investors with assets tied up in the country to do what can be done in order to cut losses and maintain investment capital. If history has taught the modern world anything in the 21st century, it’s that bubbles burst.