Kyle Bass, Hayman Capital Hedge Fund Manager, is best known in the finance world for predicting the 2008 housing market meltdown. Few listened then, but took his careful study of markets more seriously after the housing market imploded. Btw, he made millions.

Bass was recently interviewed at the 2011 AmeriCatalyst Convergence conference, AC2011, where he provided the audience with his analysis of global market trends and what his happening to the USD.

ZeroHedge had this to say about Bass’ latest shocker –

Unlike the broad consensus of prognosticators who feel the road for the US is a decade or more, Bass sees a three-to-five year window for a credible solution to the debt saturation or else kicking the can will cease to have any impact. The reason for the proximity is the acceleration of what happens in Europe and Japan with that respective chronology his central view – which he sees a s critical in understanding for every money manager.

In this extended interview at AmeriCatalyst, he points to the optimistic self-deception biases that leave people unable to comprehend the scenarios as they either lead to a really bad outcome or a nominally bad outcome. Using the Lehman moment as an example, Bass explains how we have been conditioned to believe there is always a backstop or savior…now those backstops at a corporate and sovereign level (central banks and the IMF for example) are being called into question in their roles (being seen for what they are – as just promises) and it is the chasm between what we want to believe and what does happen that is enormous and leaves the extreme volatility, risk-on/risk-off market the way it is.

Reiterating how critical the psychology of today’s situation, Bass goes on to debunk the optimism of globalization (at least for the Western world), destroy the myth of a 50% greek writedown solution, Japanese xenophobia and savings losses, structural versus cyclical implications for US equity deterioration, US deficits and housing’s bottom, global debt saturation and how this tearing at the social fabric of the world will lead to – war.

Click HERE to watch Bass’ full interview.

h/t ZeroHedge