KYLE BASS: Germany Could Exit The Euro In '3-4 Years'

Kyle Bass

Photo: Market Makers

Hedge fund manager Kyle Bass was on Bloomberg’s Market Makers with Stephanie Ruhle talking about his bearish views on the E.U. and the status of the currency union as a whole.He said that the E.U. is “three times more levered” than the U.S. and that the entire system is “on life support.”

He believes that the there’s a small window of short-term investment opportunities in the E.U. that are akin to “picking up a dime before a bulldozer.”

Bass also echoed the popular opinion that Greece needs to leave the E.U. if it is ever going to be competitive.

However, he also went into less charted territory after Ruhle asked: “In Europe, any chance you see Germany leave the euro?”

“Yes,” he replied.

“And what kind of time frame?” Ruehle followed.

“I think in the next 3-4 years you see them take a step back,” said Bass.  “How many of your relatives would go joint and severally liable with?…Let’s not even discuss relatives, let’s discuss 17 people that you might have been fighting with for 200 years.”

Bass cites one of the reasons behind the creation of the E.U. as an enduring source of tension that precludes Germany from bailing out its neighbours. Bass believes the seeds of the E.U.’s destruction were sown over centuries of prolonged warfare and it would be foolish to think the E.U. will survive with 17 different governments.

According to Bass, “Milton Friedman was right when he said that when they hit a bump in the road it will tear them apart at the core.”

See a clip from the interview below:

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