Kyle Bass On The Coming Bond Crisis For Japan

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Source: Kyle Bass’ 5 Reasons Why The Japanese Government Bond Market Will Collapse by 2016

Notable Excerpts:

We all know Japan’s on balance sheet debt situation is now 240% debt to GDP, 25 times central government tax revenue. They have over a quadrillion of debt on balance sheet. That’s the one with 15 zeros after it. If you were to try to count to a quadrillion, and every number only took you 1 second, to get there how long do you think it will take you to count to a quadrillion?

31 million years. There is no chance the Japanese can ever going to repay their debts. Plain and simple. And they will have a crisis. They will have a bond crisis in the next 2 or 3 years in my opinion. It will be a big one.

They spend ten and a half trillion yen on interest. They only bring in 43 trillion yen in central government tax take. They spend a quarter of what they bring in on interest and their debt is free… It is so easy to see it. It’s the most obvious thing I’ve ever seen in my entire career. It’s just a question of when.

We believe that their current account will be in a full negative position by Q3 of next year (2013)… Which means that there will have to be capital input or they will have to print more money at the BOJ.

They are at the end of the road. They don’t know what to do. They don’t know where to go. And this is a perfect example of how bad it really is in Japan.

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One thought on “Kyle Bass On The Coming Bond Crisis For Japan

  1. Pingback: Japan’s Default On The Horizon | livinginabubbleblog

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