Kyle Bass on CNBC today

19 Jan

Mr Bass a well known critic of Japanese finance was once again on TV talking about the pending crisis that is looming here in Nippon. What I found interesting is how he framed the forecast. He said that the Yen will crash when it appears to be strongest. This sounds somewhat similar to the mindset of Nassim Taleb who wrote the popular book Black Swan.

The volume of tax revenue the Japanese government is spending on debt is now perhaps 30% of the total collected on an annual basis. It doesn’t take a rocket scientist to calculate that if prime lending rates are at or near 0% and the government is spending 30% of its revenue on servicing debt, how much is left over to actually reduce debt ? My guess is 0. This is because of the bountiful spending programs by the Abe and previous governments.

National Consumption Tax to increase shortly and a Yen crisis on the horizon ? Time for a shopping spree I reckon !

Link courtesy of ZH

http://www.zerohedge.com/news/2013-01-18/detonating-japanese-debt-time-bomb-kyle-bass

Also the CNBC story

http://www.cnbc.com/id/100391704

or if you prefer the direct link from CNBC

http://video.cnbc.com/gallery/?play=1&video=3000142263

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