China’s markets fell 2-3% this morning.

Losses for Chinese companies came after the yield on the nation’s 10-year Treasury note ended unchanged at 3.98%, trading within a striking distance from its three-year high. “Whether the selloff is a slight correction after a strong surge in 2017, or steeper declines on the way, remains to be seen,” Hussein Sayed, chief market strategist at FXTM, wrote in a note. “However, rising bond yields, particularly junk bonds, should keep investors worried.” “The Chinese stock market drop is reminiscent of the sell-off that we saw in the summer of 2015, and that is causing some investors to become cautious going into the thin year-end markets,” said ING currency strategist Viraj Patel, in London.

South Korea’s market also took a tumble, finishing the day down 2.4% and led down by Samsung’s 5.1% drop but that was nothing compared to Qudian’s (QD) 20% pullback (see chart above), now down more than 60% since their IPO last month and a great example of what I was talking about last week, when I said we need to be concerned with how much of our own US Markets are now indexed against Chinese companies of EXTREMELY QUESTIONABLE valuations.  

Now that we’ve established that I do know how to connect a few dots, I will once again point out that China is only the second-most indebted nation on a debt to GDP basis (maybe higher by some counts) and the massive debt taken on by their Corporations is the Global Catastrophe in the on-deck circle. Japan is still the king at about 265% while the Trump Tax Plan will do a great job of catching us up, by putting us on a path to 200% debt to GDP in just 10 years.  

At a 4% interest rate, servicing $20Tn in debt that we now have would take $800Bn. At $40Tn, we’d need $1.6Tn a year just to make our interest payments – that would be 1/2 of all the taxes our Government currently collects and far more than half after Team Trump performs their massive tax givaway to the Top 1%, leaving the Bottom 99% holding the bag for all the new Debt and subsequent interest – keeping your children and grandchildren in wage slavery forevermore.