China’s $34 Trillion Experiment Is Exploding – Kyle Bass


wealthymattersKyle doesn’t give China the 2 years that Soros gives to muddle through.Time will tell, who, if either is right.But they are both banking on a Yuan devaluation.A weak Rupee helps exports. Also the Rupee, along with the Won, Dong, Ringgit etc. are seen as proxies for shorting the Yuan. We Rupee holders had best look sharp.

Here’s Kyle’s letter to his investors:

“Dear Investors,

Over the past decade, we have worked diligently to identify anomalies in financial systems, governments, and companies around the world. We have been vigorously studying China over the last year, with the view that the rapid credit expansion in the Chinese banking system will result in significant credit losses that will require the recapitalization of Chinese banks and materially pressure the Chinese currency. This outcome will have many near-term and long-term effects on countries and markets around the world. In other words, what happens in China will not stay in China. Read more of this post

Chinese Real Estate “Investments”


Interestingly these properties were  paid for by end-buyers with savings and there are no mortgages on them.

And there are stories of the Chinese cashing in these properties and buying others in the US.

Stuck by the similarities with the Japanese idea of saving in houses to fund retirements. Unfortunately things did not pan out as projected. With a glut in houses, prices didn’t go up as projected and an ageing and dwindling population further reduced demand for houses.

%d bloggers like this: