We put Mr. Bass' letter into the link-vault and almost forgot about it until we saw this summation. From the Los Angeles Times Money & Co. blog:
Investors who are convinced that serious inflation looms -- but who’ve been putting off buying gold or some other potential hedge -- will want to read the latest client letter from Kyle Bass, the hedge fund manager who made a fortune betting against mortgage-backed securities in 2007.
Count him as convinced about inflation, too, even in the face of the deflationary forces now bearing down on the economy.
Bass, who heads Hayman Advisors in Dallas, writes:
Western democracies, communistic capitalists and Japanese deflationists are concurrently engaging in what may be the largest, global financial experiment in history. Everywhere you turn, governments are running enormous fiscal deficits financed by printing money. The greatest risk of these policies is that the quantitative easing will persist until the value of the currency equals the actual cost of printing the currency (which is just slightly above zero).
Get out the wheelbarrows!
Bass’ March client letter carried a warning about looming inflation, too. But back then, he declared the U.S. to be "in relatively better shape than the rest of the world," and thought that the dollar would be "a safer currency than any other."
The dollar, however, has been dropping since then, a downtrend that made headlines again on Tuesday.
In the latest letter, Bass seems much more concerned about the U.S....MORE