A currency devaluation is something Kyle Bass fully expects from China in the next two to three years. He has made a prediction that this devaluation will occur by the end of 2016. Bass’ prediction was made with “forty to fifty percent” accuracy, by his own admission. He believes the chance of China’s currency being devaluated this year is less than binary. However, Bass has been railing about the credit bubble in China since the fourth quarter of 2015. His tune hasn’t entirely changed, but it has transitioned into several less foreboding keys. Bass has said that he doesn’t see a “Lehman Brothers” moment for China, and that what happens to their economy won’t be “Armageddon”.
But UsefulStooges suggests that the billionaire may be doing his dead-level best to influence the economy on his own, too; and that’s something that must be considered. While his bet is that Asian currencies will decline and the US dollar will increase, ultimately the net result would–again according to Bass–be a 20% declination in America’s economy. If, in order to see the billions he has tied up in this wager, Bass were directly trying to influence investors into restraining Chinese investiture, it could be argued that the comparative increase in the US dollar that this Chinese currency devaluation may facilitate would actually be a net loss.
The problem becomes compounded when one considers that Bass has a history of questionable, manipulative financial tactics. Consider CAD, a pseudo-humanitarian group Bass uses to force pharmaceuticals into price-drops which accordingly diminish their stock value. In the end, this forces pharmaceutical companies to curtail funding which would have gone to areas like research and development. Cures on the horizon are lost. Meanwhile, when the stock-drop hits Wall Street, Bass short-sells his holdings and makes millions. The infirm lose, and Bass wins.
Additionally, Bass may be operating under some form of socialistic economic ideal. He has close ties with a despotic socialistic leader named Cristina Fernandez de Kirchner. She presides over Argentina, and has defaulted that country economically twice. The time it took her to do this? Within thirteen years. How could Bass continuously support her decisions if he didn’t agree with them on some ideological level?