Hayman Advisors founder Kyle Bass (who will
keynote the upcoming
AR Symposium) wrote to the firm's investors on May 11 with his thoughts about the European bailout of Greece. The full text of that letter, entitled The Pattern is Set - Betting the Bank on a Keynesian Free Lunch, is reproduced here with
With the avalanche of announcements over the weekend out of Europe and the IMF (and even the US Federal Reserve), I think it is important to communicate our views. The Lisbon Treaty explicitly prohibits direct monetization of fiscal deficits (i.e. printing money out of thin air in order to perpetuate deficit spending) because central bankers are (or I guess at least "were") aware it is the path to severe inflation or even hyperinflation. Just as the Romans did time and time again, the EU has now decided to change from the rule of law to...