Bass, founder of Dallas-based Hayman Capital, was famously among those who predicted and profited from the 2007 housing crisis while most investors were looking the other way.

Investors in his $1.5 billion fund, who said they have averaged after-fee returns of 25 percent annually since 2006, are hoping lightning strikes twice.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

In an interview with the Financial Times, Bass compared the Japanese bond market to a Ponzi scheme similar to Bernard Madoff's epic fleecing of unsuspecting investors.

"As long as you have more people entering than exiting, you can maintain any kind of fraud, lie or non-payment of obligation," he said.

Shorting Japanese bonds has been a fool's errand for a decade, according to the Times, but Bass says it's different this time.

"They will have a bond crisis in the next couple of years," he predicted. "A bond crisis doesn't mean spread widening. It means they lose control of rate and their currency."

Japan's population has peaked and spenders now outnumber savers, according to Bass. Further, the current account surplus has nearly dried up and the budget deficit has expanded to 11 percent of gross domestic product.

According to a poll he commissioned of Japanese investors, only 8 percent of the respondents said they would buy government bonds if the nation had a bond crisis and the government asked them to buy bonds, while 83 percent said they would "run, not walk" from Japanese bonds, the Times reported.

If Bass is right, he said that "if there's a quadrillion yen that is long the cash debt, they're all on the wrong side."