ML-Implode News - China's giant bonfire of debt needs one spark to become an inferno

... 45% of new company debt is raised to pay interest on existing debt. In a developed economy, Ponzi lending of such an enormous scale would lead to widespread bankruptcies, unemployment and massive losses for investors and lenders.
... the matches [which could set the flame, are] the increasing number and size of defaults. The February collapse of the $7.6 billion Ezuabo online lending platform is thought to have ensnared up to 900,000 Chinese "investors". It was followed by the $3.9 billion collapse of Zhongjin Capital Management earlier this month. This week, the state-owned China Railway Materials Co Ltd. has halted trading on $2.6 billion of debt, including commercial paper, as it investigates options for restructuring its debt.

At some point the increasing size and frequency of defaults will cause investors to lose confidence in debt investments and switch to bank deposits, physical cash or gold.

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China's giant bonfire of debt needs one spark to become an inferno