Japan will be forced to default on its debt, Greece's economy is "done" and Iceland is worse off than Greece, said J. Kyle Bass, the head of Dallas-based Hayman Advisors LP who made $500 million in 2007 on the U.S. subprime collapse.
Nations around the world will be unable to repay their debt, and financial austerity in a country such as Ireland is "too late," Bass said Wednesday at the Value Investing Congress in New York.
Japan's economy may unravel in the next two to three years, and its interest payments will exceed revenue, he said. "Japan can't fund itself internally," Bass said.
The country's year-over-year gross domestic product was 2.4 percent as of June 30. It has the world's largest public debt, approaching 200 percent of its GDP amid a 5.1 percent jobless rate. Consumer prices fell by 1 percent in September and have been negative each month since May 2009 as deflation has taken hold.