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February 16th, 2016 
Awake Goy Yes, you read that right. Amidst a tumbling stock market, plunging trade data, weakening Yuan, and soaring volatility, China’s aggregate debt (so-called total social financing) rose a stunning CNY3.42 trillion (or an even more insane-sounding $520 billion) in January alone. In fact, since October, China has added over 1 trillion dollars of credit… and has nothing but margin calls, ghost-er cities, and over-supplied commodity-warehouses to show for it… oh and even-record-er debt-to-GDP ratio.
Unprecedented half-a-trillion dollars of debt added in January…
Smashing China debt/GDP even greater than the 346%… Just as we warned three years ago (and is now painfully obvious)…
What should become obvious is that in order to maintain its unprecedented (if declining) growth rate, China has to inject ever greater amounts of credit into its economy, amounts which will push its total credit pile ever higher into the stratosphere, until one day it pulls a Europe and finds itself in a situation where there are no further encumberable assets (for secured loans), and where ever-deteriorating cash flows are no longer sufficient to satisfy the interest payments on unsecured debt, leading to what the Chinese government has been desperate to avoid: mass corporate defaults.
This could be the end as the last bubble standing (in China corporate debt) has begun to burst amid the over-supply of credit…
What happens next?
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