Some Words Of Advice From Kyle Bass
Michael Lewis' latest compilation of Vanity Fair articles into book format, Boomerang, is the usual entertaining romp around those back and front waters of the world that are currently on the verge of bankruptcy: from Greece, to Ireland, to Germany and, of course, to California. The premise at its core is an interview that the former Salomon bond salesman had with investing wunderkind Kyle Bass several years back which inspired to him to ask what it is that the Texan saw three years ago that so few others, due to a permafrosty cognitive bias or what have you, could (i.e., that the world is bankrupt and getting much worse). Oh, did we say wunderkind? We meant billionaire. Because unlike that other "anti-Midas" who only piggybacked on the good ideas, while blowing up LPs when left to his own non-Goldman Sachs facilitated devices, Bass actually could always see the big picture for what it is. So courtesy of Lewis' latest book, here are three pieces of advice from Bass to people everywhere, which will surely bring the fanatically jealous anti-gold crew to accusations that Bass made his billions from buying and reselling tinfoil hats.
On gold:
A guy sitting in an office in Dallas, Texas, making sweeping claims about the future of countries he’d hardly set foot in: how on earth could he know how a bunch of people he’d never met might behave? As he laid out his ideas I had an experience I’ve often had, while listening to people who seem perfectly certain about uncertain events. One part of me was swept away by his argument and began to worry the world was about to collapse; the other part suspected he might be nuts. “That’s great,” I said, but I was already thinking about the flight I needed to catch. “But even if you’re right, what can any normal person do about it?”
He stared at me as if he’d just seen an interesting sight: the world’s stupidest man.
“What do you tell your mother when she asks you where to put her money?” I asked.
“Guns and gold,” he said simply.
“Guns and gold,” I said. So he was nuts.
But not gold futures,” he said, paying no attention to my thoughts.
"You need physical gold.” He explained that when the next crisis struck, the gold futures market was likely to seize up, as there were more outstanding futures contracts than available gold. People who thought they owned gold would find they owned pieces of paper instead. He opened his desk drawer, hauled out a giant gold brick, and dropped it on the desk. “We’ve bought a lot of this stuff.” At this point, I was giggling nervously and glancing toward the door.
So many others were giggling along. They were giggling all the way as gold rose from $800 to $1900. Probably not giggling now...
On nickels:
He still owned stacks of gold and platinum bars that had roughly doubled in value, but he remained on the lookout for hard stores of wealth as a hedge against what he assumed was the coming debasement of fiat currency. Nickels, for instance.
“The value of the metal in a nickel is worth six point eight cents,” he said. “Did you know that?”
I didn’t.
“I just bought a million dollars’ worth of them,” he said, and then, perhaps sensing I couldn’t do the math: “twenty million nickels.”
“You bought twenty million nickels?”
“Uh-huh.”
“How do you buy twenty million nickels?”
“Actually, it’s very difficult,” he said, and then explained that he had to call his bank and talk them into ordering him twenty million nickels. The bank had finally done it, but the Federal Reserve had its own questions. “The Fed apparently called my guy at the bank,” he says. “They asked him, ‘Why do you want all these nickels?’ So he called me and asked, ‘Why do you want all these nickels?’ And I said, ‘I just like nickels.’”
He pulled out a photograph of his nickels and handed it to me. There they were, piled up on giant wooden pallets in a Brink’s vault in downtown Dallas.
“I’m telling you, in the next two years they’ll change the content of the nickel,” he said. “You really ought to call your bank and buy some now.”
And on how to prepare for what is coming and why it is coming:
We hopped into his Hummer, decorated with bumper stickers (God Bless Our Troops, Especially Our Snipers) and customized to maximize the amount of fun its owner could have in it: for instance, he could press a button and, James Bond–like, coat the road behind him in giant tacks. We roared out into the Texas hill country, where, with the fortune he’d made off the subprime crisis, Kyle Bass had purchased what amounted to a fort: a forty-thousand-square-foot ranch house on thousands of acres in the middle of nowhere, with its own water supply, and an arsenal of automatic weapons and sniper rifles and small explosives to equip a battalion. That night we tore around his property in the back of his U.S. Army jeep, firing the very latest-issue U.S. Army sniper rifles, equipped with infrared scopes, at the beavers that he felt were a menace to his waterways. “There are these explosives you can buy on the Internet,” he said, as we bounded over the yellow hills. “It’s a molecular reaction. FedEx will deliver hundreds of pounds of these things.” The few beavers that survived the initial night rifle assault would wake up to watch their dams being more or less vaporized.
“It doesn’t exactly sound like a fair fight,” I said.
“Beavers are rodents,” he said.
Whatever else he was doing, he was clearly having fun. He’d spent two and a half years watching the global financial system, and the people who ran it, confirm his dark view of them. It didn’t get him down. It thrilled him to have gotten his mind around seemingly incomprehensible events. “I’m not someone who is hell-bent on being negative his whole life,” he said. “I think this is something we need to go through. It’s atonement. It’s atonement for the sins of the past.”
The take home: Atonement is coming, bitchez. Beavers beware.
For those who want much more, here is a one hour interview in which Todd Groome and Toni Moss spoke with Kyle at AmeriCatalyst 2010 in Austin in September, asking him about his thoughts on prospects for housing market recovery, current policy issues and national debt implications, global debt imbalances and his perspectives on the influence of policy on the timing, sequence and magnitude of potential sovereign defaults and debt restructurings. Fascinating stuff.
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WOW,
gold and guns...
nickels...
well, i see ZH is making its mark...
if people with BIG money are getting ready for a 'controlled' or uncontrolled default,,look out!
Wate, i thowt wee wass ignernt rednex..
nope, i dont think so....
i think you guys were ahead of the curve...
as usual...
“I think this is something we need to go through. It’s atonement. It’s atonement for the sins of the past.”
I've thought this since W...
We've literally got hell to pay...
i've always thought it was going to be bad...
just how we prepare now will determine how bad it will be for each of us...
but it will be bad...
Unlike Bass, I prefer dimes to nickels, whether they be pre 1965, blond, brunette or red head!
However, like Bass, I too enjoy exploding on beavers!
im a dime hound, too..
i dont go for gold, but everyone has a preference...
im not a gun guy either...well, anymore...
red beavers are pretty wild....my favorite!
Kyle's a smart guy, but what's he going to do with those nickles? It's illegal to melt them. Even if he finds someone willing to break the law, they're going to want a cut. Perhaps I'm missing an angle. Additionally, why would he divulge the fact that he has land, weapons, and explosives? Sounds like an invitation to the ATF to me.
It will only remain (technically) illegal to melt those five-cent coins until they are no longer produced by the US Mint.
It was also illegal at one time to melt 90% silver coins --- do the smelters have to worry about today?
Personally, though, I think the tactic is ridiculous --- if one wants to hold physical metals, gold, silver, platinum or palladium are vastly less bulky, and have a much more established market than cupro-nickel alloy.If the metal in the coins were today worth, say, four or five times their face value, then one might have justification for hoarding them, but at a 10 or 15% differential, why the fuck would one bother? Assaying and processing fees would easily eat up that small current value advantage.
If he betting on HI occurring in the USA then a million dollar's worth of nickels would be good for exchange, to procure what he needs during such an event.
A million dollars is spending money for a billionaire after all.
He can make a hell of a battery with all those nickels, like Walter did when caught in the desert in Breaking Bad. Plus, it's like holding cash with some real value as insurance.
Nickel? Ha, put on the brass/lead/copper combo spread..... = bullets....
He can make a hell of a battery with all those nickels, like Walter did when caught in the desert in Breaking Bad. Plus, it's like holding cash with some real value as insurance.
Yes, but if he is WRONG.. all he has to do is cash in his nickels and take a fractional loss. If he buys silver or gold, he has to pay a high premium, and if the government doesn't print money, prices may fall drastically. If you buy nickels by the MILLIONS the bank is definately going to charge some type of fee to get you all the nickels you ordered. So there is risk involved. But like I said, if things turn around, he can cash the nickels back in for a minimal loss. If he is right.. well.. he paid around spot for copper and nickel and if he can sell it for fair market value, he could make a 50+ percent profit.
Hah that's actually brilliant.
Downside protection against deflation and upside gains based on inflation.
It gets even better. If or when the government decides to revalue our currency by knocking off a couple of zeros and re-issuing "new" paper money, history shows governments LEAVE the coins as-is. So the coins KEEP their face value, while the paper loses big time.
So there you have it.
On the other hand, if we all wake up one day to find our government has gifted us with a brand new currency, say at an exhange rate of 10:1 or even the favorite of North Korea - 100:1, governments seldom bother with the coinage and those nickels will probably make the transition at a happy ratio, each being worth 1/20 of a new currency dollar. So while those not so foresighted have seen their net value drop to $10,000 for every $100,000, the value of his nickels will have made the transition intact. Smart guy.
For $500 you can get 5 bank bricks - 10,000 nickles, and at worst, you have $500 cash that will tone the biceps.
At best, you have modest amount of coins that can make the transition to low level bullion when the government decides to stop making them at a loss and might have incremental value in Barter Town.
Two weeks ago I went right down to my bank and ordered $500 in nickels. The head teller said she would have them in three days. She also asked why I wanted the nickels, so I said "I like nickels", that was it. I felt pretty special when they rolled out my nickels on their bullion cart, all the way out to my car. $100 bricks of nickels still look pretty good. All brand new 2011 in rolls, in bricks.
3 - 4 weeks ago on ZeroHedge a young 20 something who lamented his inability to get in the game of PMs because of his minimum wage job left him broke w/not alot of cash to spend.
I suggested he get rolls of nickels at banks and casinos because of the spread.
Also the potential of finding pre- '65 issue
I was laughed at by some ZeroHedge posters.
For the record, this was not my idea but James Wesley Rawles over @ survivalblog.com has a story on this subject
Up until 1964, nickels were 25% nickel and 75% copper. But starting in 1965, they changed the composition to 75% copper and 25% nickel.
i thought diamonds had the "ounce per dollar" victory hands down? ah, i understand. governments don't back anything in diamonds.
I filled my basement with 14 tons of newspapers, at $3 a ton........
Need a light?
Hence the nickles, bribe money......
This is Texas... Land, weapons, and explosives are just the norm. Yes explosives are very legal to farm & land owners... In fact the mixture that was used to blowup the fed building in Oklahoma City, is exactly what ranchers use to remove tree stumps, beaver dams, ground hogs, etc.. The only difference is ranchers don't use truckloads of the stuff.
Short of the nickels, his stockpile sounds like many of my neighbors.
Wait a minute.. You're telling us that a bomb in a truck parked on the street blew off half of a concrete building, including the supporting columns? Ok, physics major, nice try..
Well I guess I am telling you that... But my point is, bags of that same mixture are in barns all around here, and it's perfectly legal.
I take your word that it is all perfectly legal. I've no reason to doubt it. Sounds like that's the law.
I will never believe, though, that the damage to OKC federal building was done by a fertiziler bomb on the street and not explosives attached to the supporting columns of the building. That's just physics. http://cache.blippitt.com/wp-content/uploads/2010/04/oklahomacitybombing...
If you haven't, check into the story and death of OKC police officer Terry Yeakey.
In Ghana we have seen old (copper) coins trading as tokens in the market, despite the fact that their face value was less than 1/10,000th of a cent. You don't need to melt them--they are a known weight of metal. The same could be true of nickels (and old pennies) after a currency event.
Never mind... some clever people above made more interesting points.
What do folks do with all those silver dimes, quarters, halfs and dollars from 50 years ago.
I don't know a single individual who melts them down - legal or not - but they're still worth a metric shit-ton more than face value today. A quarter, 50 years ago, was 25 cents. Now it's, what, about 600 cents?
So, too, will the nickels go.
As long as he doesn't shave the beavers, he's okay in my book.
Just a little trim around the edges and snip the split ends.
"W" as in Woodrow Wilson, right?
Nicely done, knukles.
And the dude pays good money on the value of tinfoil hat trade in's.
My neighbor just bought an upgraded aluminum foil hat with all the bells and wistles.
hmmm...
well, evil
how can someone preparing for an emergency be wrong...
FEMA says stock up, in case of an disaster
i think most ZH'ers see a disaster coming...
no tin foil hat needed for that...
We'll all need tinfoil hats soon, keep the RFID chip implanted in your brain from networking with skynet.
They'll also serve another purpose.
Zombies are attracted to the Delta waves generated by the electro-chemical impulses of your neurons.
Therefore in order to keep the Mexican zombie hordes from discovering your whereabouts, you'll need a 100% aluminum foil hat to attenuate the signals produced by your delicious brain.
Brains, the delicacy of zombies.
Tin foil hats don't protect you from beaming. They enhance it.
Here is THE definitive study--
http://berkeley.intel-research.net/arahimi/helmet/
On the Effectiveness of Aluminium Foil Helmets: An Empirical StudyAli Rahimi1, Ben Recht 2, Jason Taylor 2, Noah Vawter 2
17 Feb 2005
1: Electrical Engineering and Computer Science department, MIT.
2: Media Laboratory, MIT.
>>>Among a fringe community of paranoids, aluminum helmets serve as the protective measure of choice against invasive radio signals. We investigate the efficacy of three aluminum helmet designs on a sample group of four individuals. Using a $250,000 network analyser, we find that although on average all helmets attenuate invasive radio frequencies in either directions (either emanating from an outside source, or emanating from the cranium of the subject), certain frequencies are in fact greatly amplified. These amplified frequencies coincide with radio bands reserved for government use according to the Federal Communication Commission (FCC). Statistical evidence suggests the use of helmets may in fact enhance the government's invasive abilities. We speculate that the government may in fact have started the helmet craze for this reason.<<<
I thought ZHers where smarter than to fall for the obvious NWO propaganda on tin foil hats.
Sheesh...
uh
Your research tax dollars at work.
hey, rocky, please tell me these guys arent serious....
WTF
I've almost got the $250K, then I can buy my own 'network analyser'!
I only use genuine 3M Velostat ® in my deflector beanies! It keeps the aliens away, but also much lighter!
http://www.stopabductions.com/
P.S. That MIT Team works for the Illuminanti so what do you think THEY want you to think!
I thought we were trying to stop the government from beaming messages into our brains? What do aliens have to do with this?
Stop trying to obfuscate the issue!
[Alien abduction may be the only way to avoid getting swept up in the Great Reset...So there.]
Sounds like he's just a good ol' boy ...
http://www.youtube.com/watch?v=ch41ZEtGIe4
Regards,
Cooter
hey, cooter,
he sounds like he see's something...
It didn't occur to me just now, but I think Kyle Bass is part of the Bass family from Ft Worth.
The Bass family is an interesting clan. You can read a bit here ...
http://en.wikipedia.org/wiki/Robert_Bass
Short version is the Bass family is multi-generational business owners involved in a lot of stuff. They are very active in Ft Worth with regards to arts, philanthropy, and such. They just seem like a class act for the most part.
Besides, if I had a couple billion, I would have a huge ranch, explosives, and sniper rifles too ... LOL
Regards,
Cooter
well, they dont sound like good ol' boyz...
they sound like the're connected...
and they see something...
total reset will only affect the bottom 99% - and there’s the rub.
.
yep...
but i think this was planned long before i was born...
Let's not forget Kyle encouraged the Univ. of TX to buy a billion dollars worth of physical gold:
http://www.zerohedge.com/article/golden-tipping-point-university-texas-t...
Here is someone who puts his money where his mouth is.
Beans, bullets and bullion, bitchez!
well, i looks like the awakening has come...
ZH was right, and we were here...
Hah!
Late to the thread, but my old man is from UT (Vietnam GI bill with kids while on AD and all that). Anyway, I called him to talk to him about that. I said, you need to call you alum and get them to cast that shit into a Bevo calf to roll out before the ball games ... the other universities can't keep up with that ... he DIED laughing on the phone. Priceless father-son moment, will never forget it.
Disclosure: he is a Masters in Finance and work for years at the RRC in Texas as an auditor. That man can tell some stories that will just knock your socks off. He is still holding back on the good ones, but as he gets older, I get new episodes. :-)
Regards,
Cooter
Try "go forth and multiply" as the origin. Bad design input when we're limited to a single planet: but then again, perhaps it was a test to see if we could get off the planet, in which case there was in fact a humane reason for those V2 Rocket scientists... (who were to later be lavished with money to work for NASA- who says that [war] crime[s] doesn't pay?)
And those tin-foil hats? Yeah, part of the plan (most won't believe that they actually help facilitate receiving and transmitting signals, believing that they hinder it, but that's how the "plan" gets things done; and when those folks get bombarded with signals they'll be so confused as to appear, well, stupid)!
Ag & Au are ductile metals, wonder how long it would take to fashion a helmet out of some kruggerrands...
I am quite certain at an instinctual level, that part of the 99% will ensure that some of the 1% will have an ooportunity to enjoy the party. The planet is not that large and history (REAL history) is a good guide.
Germany Will Attempt to Default Greece: Kyle Basshttp://www.cnbc.com/id/44761714
A few sniper rifles won't protect you from the zombie hordes streaming up from Mexico once the system implodes.
Better stock up on some .50 cal mini-cannons & .50 cal mini & STA 52 LAR & MK 49
Pure E,
Bet your ass,he has buddies, and a lot of them(paid/mercs/friends), and the money to pay for whatever he wants. I would wager unless you have an Apache,and a wad of RPG's, you won't set foot on his place and live.
Why do I think this?, because if I had Bass $$$ you wouldn't, and my money is as smart as he is, he's over prepared.
Folks like Bass,play by different rules than mere moratls.
So I guess that leaves the rest of us to be brain fodder for the zombies that speak spanish.
Still, after about 20 million zombies surround your compound, your bound to run out of bullets, best to have a few tactical mini nukes on hand to help thin out the herd
Atomic cannon
Or a few of these to clear a path to safety:
MOAB
Pure Evil
The only realistic Zombie solution appears in Biozombie.
If you can't beat them join them.
Much too unwieldly. Need a cute chubby little bugger like this:
http://en.wikipedia.org/wiki/File:DavyCrockettBomb.jpg
Very cool!
Its now on my Christmas list of new weapons to add to my arsenal.
When the zombies come, they won't be asking questions, they'll just be kickin' ass and takin' brains.
Nickels make great shrapnel.........
DosZap
Riddle me this, what does he pay with when money is worthless? How interesting it will be to see rich people trapped in compounds with hired help looking around at the oppulence and realizing this could EASILY be theirs.
that is why he bought nickels. However goldbug should keep its mouth shut, I don't understand why he gave this interview.
He has more than anyone could ever need. Too bad more of the .01% aren't like him.
That makes me think that the OWS crowd has to have their general thesis wrong. When you start assuming 1%, that includes a whole lot of honest people who aren't connected and just made a lot of good decisions. If the OWS crowd were really awake, they'd call themselves the 99.99%.
Bass has money, but I doubt he's close to being part of the upper one percent. Of course, I don't know the threshold for being in the one percent club; 500+ million?
Very true!
When you talk about individuals with multi-billions, Gates, Buffet, Carlos Slim, etc.
500 million+ is just the entry fee.
more like "puree" if that's the firepower you're talking about.
I prefer to return to my own village, where solidarity still exists. And also where zombies won't bother going because it's too damn far. I feel sorry for those stocking on guns and actually feeling they will use them on people. Then again, maybe I'm too Canadian.
http://maps.google.ca/maps?hl=fr&ll=50.341955,-61.77063&spn=0.78002,1.966553&t=h&z=9&vpsrc=6
I hope Bass knows how to share. Because as much as guns and gold will be necessary for survival, so will community.
Paul E, at his level of game, he doesn't have to. He simply buys his own. I'm not knocking him, it's just how guys at that level roll. If you were in his shoes, wouldn't you?
When it gets to the point of kill or be killed, moral relativism is no longer even interesting. How the fuck far do you think you (me, others) are from the caves. Civilization is an era, not an end.
http://www.southparkstudios.com/full-episodes/s15e09-the-last-of-the-meh...
When things implode, life in Mexico will probably be more bearable than in most of the states...their system has already imploded and their more "primitve" economy is less likely to experience a shock. They get to go from Third World status to....Third World status. Plus they already have a functioning neo-feudal system of government in place in the form of cartels. It will be more painful in the US as Americans adjust to a similar reality. The real people who have to worry about zombie hordes from the south are the Canadians.
Prescient.
So, you expect to see a horde of malnourished, poorly clad Mexicans swarm?
History says that large masses of starving people tend to struggle along and drop like flies as they travel.
I'm more fearful of all the nutjobs armed with those cannons who will come after my food once their c-rations (and techo-crap) give out. These are the folks that'll be recuriting others. They're the ones that are programmed to see everyone but their ilk as "the problem."
The other shit makes for a great story though...
No, he is not related to them (the Bass' of Ft. Worth.)
Not part of Bass Family. He is self-made. See below article.
http://www.forbes.com/forbes/2010/0208/debt-recession-worldwide-finances-global-debt-bomb.html
Is that the railroad town of Ft. Worth?
NO, the RR town of Ft. Worth had value.
He is a good old boy. Just like many of the Texas elites from the area, he went to Country Day prep school, Stanford, then Harvard.
He makes NO mention of THREE unfunded wars, dead giveaway. Sure Kyle, kill medicare and keep these wars going. What a fucking tool.
So does that make him a Dem, a Repub or just someone who does not particularly give a shit about DC and the moneymasters. Could he possibly be just a (gasp) individualist who figures each person is maybe responsible for thier own situation?
Actually, he explicitly singles out defense industry growth as the same evil as government growth when he says the only private sector growth in 10 years has been in healthcare, defense and education - surrogates for USG.
Kyle for President!
Kyle Bass is as brilliant as Dr. Michael Burry, with a different sense of humor and personality, no doubt. About time Lewis covered him... unfortunately, I do not think that Lewis took Bass seriously enough. When will Lewis be able to take that next step into the nightmare world of Keynesian melt-down?
Hmmm! Guns for a regiment but an army of one that needs to sleep after 72 hours playing general with no troops. Go gold. Find it in a hole. Dig it up. Guard it. Bury it. Repeat. When confidence in any decent solution, no cares.