Kyle Bass’ predictions about China’s implosion have been regular, but they may or may not be substantiated. On the one hand, he’s saying that China’s credit bubble will result in an economic implosion within the next three years. He also says there’s a forty to fifty percent chance said economic deflation could come by the end of 2016, which would end up costing the United States economy. Then, in a recent Bloomberg interview, Bass said that should China allow currency devaluation to occur in a “material” way, it could be one of the most exciting times historically to invest in Asian markets.
Bass began predicting economic implosion for China in October of 2015. Here it is July of 2016, and as yet his predictions have fallen flat. Is this the reason he’s subtly building himself an out? That his predictions were unwarranted to begin with? That he needed to maintain credibility in the event his manipulation tactic fell flat? It’s definitely not without Bass’ wheelhouse for economic manipulation strategies to be employed on Wall Street. In fact, this is his primary history. He dropped a tip in the earlier part of 2008 pertaining to investment trading practices between the top five investment banks at the time. The journalist who reported the tip is seen as a nexus point from which Bass’ previous employer, Bear-Stearns (against whom he provided the tip) began their collapse. By the end of the week, J.P. Morgan-Chase had to buy them out. By the end of September, an entire Wall Street collapse was in full swing, tumbling like dominoes. Bass didn’t set those economic dominoes up, but he certainly helped start them tumbling.
Additionally, Bass may be a socialist economist. He regularly supports Cristina Fernandez de Kirchner, who regularly defaults her country economically. She’s done it twice in 13 years, and is known by many as a socialist despot.
Lastly, Bass started CAD, the Coalition for Affordable Drugs. This organization uses public sympathy to manipulate law forcing price drops among pharmaceuticals which accordingly bottom-out their stock, allowing Bass to short-sell and make millions while the companies must curtail funding to departments like R&D to remain afloat.
With these things in mind, what Bass has said about China’s economy looks more and more like a scheme to prompt inexperienced (but lucrative) investors into avoiding China in order that his prophecy of implosion becomes the self-fulfilling kind.