There's a major discussion eh? Okay, um, let's talk real wealth for a second - real wealth is created by work - labor is only source of generating real wealth, and with roughly 1/3rd of the global labor force sitting on it's ass, real wealth production is also down dramatically. That is reflected in the closed businesses, etc. People going to bed as soon as it gets dark, instead of going out at night. So, there's a real decline in overall economy right there. This is deflation. The central bank money printing at unprecedented levels is helping to paper that over, and hides the effects sort of, but it is also highly inflationary. The idea is to balance the two and try to manage the economic slowdown, hoping people won't notice that they are getting poorer, now very quickly. The people have been getting poorer for forty years, only slowly for the most part. So, over in China, the Chinese economy has two major parts to it, domestic consumption and exports. Chinese economic growth is subsidized via export sales growth. That export sales growth is now export sales decline, and massively so. First off, shipping is majorly interdicted with logistical backlogs at all of the major ports, and secondly, a real decline in consumer purchasing has accompanied the real decline in economic activity. They like to pretend this hasn't happened, but with 1/3rd of the global economy sitting on it's ass, there is no way that it has not happened. Sales are down, way down. That's a double hit for China, because they manufacture all of those goods that are now not being purchased overseas. The jobs that go with that production are now layoffs at home, so domestic income which supports domestic consumption is also in decline. For companies like Evergrande - already overextended with loans, suddenly their revenue streams are drying up and there is no other source of income to be had, anywhere. China has all kinds of companies in exactly the same boat - all with revenues drying up. They have lost domestic sales, and they have lost export sales. They cannot repay their loans. Inevitably, they have to roll back operations - which means job losses, etc. They have to roll back production to meet the new level of global demand. (supply and demand) The only question remaining is will the Chinese government prop them up while they downsize, or let the free market do it via bankruptcy and rapid re-tasking of investment capital? For China, the second approach is seemingly not optional. Too much poverty is destabilizing for Communist regimes. They have to prop them up. This means more government intervention, more rules, and more inefficiency across the board, just as in real soviet communism. This also means, investors will be backing out of China. Maybe moving some of that production money over to places like India, or Vietnam, or the Philippines, or wherever they can operate more freely, without the government intervention the Chinese are being forced to impose. So, China remains an economic powerhouse, but it will be stagnated by debt burden. Stalled, if you will. Bogged down in the mud. New investment will not be as readily flowing into China. Money flowing out of China will also taper off very quickly, which should be reflected in a stall in Western real estate markets, especially in Canada. So, yeah, that's where we are at. They could easily fuck it up and crash the system. The best way to remove mountains of debt is to just write it off in bankruptcy, let the chips fall where they may, and rebuild the growth cycle after that. A major recession. A major stock market downturn. The Communists do not have the luxury of that option. Much of China is still as poor as they were forty years ago. China will be forced to increase welfare to offset the job losses. They have to keep their people calm. Consider Japan for a moment, because they got bogged down in their own debt trap thirty years ago and have still not fixed it. Japan remains stagnant after three decades of financial crisis. In the 1980's Japan was hot as hell, the cash was flowing, and Japanese corps were buying property all over the world. Not so much since then. China now enters the same scenario. What's China's best play? Remember Lehman Brothers? Remember how the Fed stepped in and bought $20 trillion dollars worth of defaulting mortgages from the banks at full retail, put the mortgages into a filing cabinet, and threw the cabinet into the Hudson river? That's what China needs to do with these companies. Step in, buy out the bad loans at full retail, and save the companies. Then just erase the loans from the balance sheets. Yes it's inflationary. Yes it devalues the currency. But how is that any different than the devaluation of all of the global fiat currencies over the past fifty years? That is another discussion.