The Chinese economy has been in the throes of a pre-recession for some time, and they are not growing at the rate they once were. There are several investors who are waiting to see what will happen as China adjusts its economic policies, but Kyle Bass is betting against China in a run on currency speculation.
#1: China’s Yuan Currency Is Faltering
The Chinese government is quite nervous about the state of their yuan currency, and they must alter their economic policies before the yuan falls apart. The government reserves the right to make changes to their policies at any time, and they may halt trading on the yuan if they see fit to do so. Kyle’s bet against China simply will not work because China may solve the problem by using powers Kyle does not have.
#2: Kyle Has Been Quite Brash In His Prediction
Kyle has told multiple media outlets of his prediction, and it is quite difficult to miss it. He is brash because he believes he is correct, but he has left out the most crucial step where the Chinese will alter their policies until he is thwarted. Everyone who speculates on currency must be assured that economic policies will not change overnight as they invest.
#3: Kyle Failures Go Beyond China
Kyle’s hedge fund at Hayman Capital is in ill health, and he is no longer an active member of the investment community. Kyle has spent much of his time on television and radio, and he prefers to make his name in the realm of pop culture.
Kyle Bass’ brash call on the Chinese yuan is incorrect in all respects. The currency may not lose all its value, and the Chinese government can stop the fall of the yuan at any time.