Kyle Bass says the big money has been made in bitcoin. This is where investors need to put cash next. – MarketWatch

A hedge-fund manager who made winning bets on subprime loans back in 2007 isnt too worried about a repeat of that crisis.

I dont believe were in a bubble today, as far as ratios are concerned and leverage in the system is a concern, Kyle Bass, founder and chief investment officer of Hayman Capital Management, said in a weekend interview with the Investors Podcast Network.

Thats because the U.S. has 40% more foreign cash in the system from two years or even 18 months ago, he said. Im a monetarist at heart. I believe, if you increase the money supply by 40%, youre going to have a 40% depreciation in purchasing power, roughly thereabouts, he said.

And while the amount of appreciation in real estate has been unprecedented over the past two years, in order for a bubble to form, its going to have to get to many multiples of peoples income tough with more jobs than people right now.

In ourcall of the day, Bass said he thinks investors should be sticking cash in one crucial place. I think assets, including real estate, are going to continue to move much higher over the next decade because I think the central banks cant raise rates more than 100 basis points, he said.

But as individuals see the value of their dollar depreciate and hes especially worried about hydrocarbons and food inflation in the next year forget bitcoin as the perfect substitute or a great substitute for gold and/or an inflation protector.

Bass said from here on out, its going to be really difficult to make money on bitcoin due to intense regulation he sees coming in 2022 from the U.S. government, followingChinas crackdowns this year.

I think that the blockchain, I think that NFTs [nonfungible tokens], those things are all very much here to stay. Private crypto, I put a question mark by over the long run. Id be careful with that now, he said.

But those who are cashing out are likely buying real estate and land over gold. I think about the tangible benefits and both physical and mental benefits of being outside. I think thats likely to move a lot faster than gold does. Id much rather own that kind of land, he said.

His sweet spot is rural land, where Bass noted you can put a judicious amount of leverage on itand stay way ahead of this insidious degradation of your savings. Hes so convinced of the assets worth that he set up a private-equity firm a couple of months ago Conservation Equity Management to buy land and mitigate environmental impacts from big industrial and commercial land users.

He sees prices of land moving much higher in pro-business and low tax states such as Florida, Texas and Tennessee.

Bass ended the interview with a warning on China, of which he has been a longtime critic. Noting increasing rhetoric, he sees that country invading Taiwan as soon as mid next year. That would put the U.S., its military and everyone else who depends on Taiwan Semiconductors wafer fab in big trouble, especially as the companys semiconductor fab under way in Arizona is still years from completion, he noted.

And dont even think of going near China real estate, as he sees all those highly leveraged developers such as Evergrande 3333, +4.03% getting wiped out, leaving Chinese banks with holes in their balance sheets. He also warned against U.S. investor FOMO [fear of missing out] over Chinese stocks, noting that even if Alibaba BABA, -0.16% looks cheap, its financials are a mystery.

That packed interview can be foundhere.

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The Empire State manufacturing index is ahead, but the weeks big data will be retail sales, due Tuesday.

Swedish EV maker Polestar, due to go public via a merger with a SPAC Gores Guggenheim GGPI, +15.38% says its aiming for sales of 290,000 by end 2025.

Austria is beginning a 10-day lockdown of people unvaccinated against COVID-19 as Europe battles a COVID wave. Surgeon General Dr.Vivek Murthywarned of an uptick in cases in the U.S. as cold weather arrives.

The flagship fund ARKK, -0.81% of Cathie Woods ARK Invest has sold most of its remaining stake in online real-estate firm Zillow Z, -0.64%.

American Tower AMT, -4.26% is buying data-center real-estate investment trust CoreSite COR, +3.55% in a $170-per share deal.

President Joe Biden will hold a virtual meeting with his Chinese counterpart Xi Jinping on Monday.

Meanwhile, Biden reportedly could make his Fed chair pick as soon as this week, renominating Jerome Powell or choosing Fed Gov. Lael Brainard instead.

Stocks DJIA, -0.04% SPX, -0.00% COMP, -0.04% are higher to start the week, but other assets, such as oil CL00, +0.66% and gold GC00, +0.03% are down. Bitcoin BTCUSD, -3.74% is cresting above $25,000.

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Kyle Bass says the big money has been made in bitcoin. This is where investors need to put cash next. - MarketWatch