donderdag 27 december 2012

Added Kyle Bass as Guru

I decided to add Kyle Bass to the list of gurus on this blog.

He seems like a smart guy, knowing a lot about debt. And he is pro-gold.

Most important is that he says Japan is going to have a bond bubble crisis as early as next year (2013). I talked about this here and it shows that revenue of Japan is quickly going down, while interest expense is just being kept low by printing yen to buy government bonds. But, the interest payments as a percentage of tax revenues is rising, even when rates are being kept low. I said there is a point where it doesn't work anymore.

That point has arrived: The problem is, if the current account goes negative, which is already happening now, the fiscal deficit can't be maintained any longer (previously, the current account surplus was higher than the fiscal deficit. Not anymore now). Meaning, the tax revenues will eventually all go to the payment of interest on debt.

Result: implosion of Japanese bond market and nominal rise of Japanese equities. Japanese pension funds will buy huge amounts of gold. (BTW, Nomura has already surged a lot, maybe it's time to cash in the profits)

Watch his 2012 seminar here:
http://www.youtube.com/watch?v=JUc8-GUC1hY

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