shared the full presentation with us here
, although in the video below I've narrowed it down to just over 8 minutes covering the 5 key reasons Kyle Bass
believes the Japanese government bond market collapse by the end of 2016 if not sooner. We've discussed the collapse of Japan a good bit here on InformedTrades; see our Japan archive
, as well as DREBG's blog
for some technical trades related to the yen.
The five reasons Bass expects the Japanese government bond market to collapse are as follows:
1. Japan has an extremely high amount of debt; it simply cannot be repaid.
2. Interest expense on debt is very high and growing.
3. Contrary to popular belief, Japan is NOT self-funding. The Bank of Japan will need to print more money in the years to come.
4. Japan's demographic crisis has arrived. The country's population is declining, its taxable income is declining, savings rate are declining, and social security payments are rising.
5. The Japanese government is at a loss for how to deal with the problem.