Mortgaging the Other Guy's Future

 Why China’s Debt Crisis Is Much Worse Than America’s | Export Numbers | BYD Pain

For years, China would "print" a lot of money and "experience" a lot of deflation -- sorta counterintuitive. I'm reminded of Keynes's "Liquidity Trap," where people have money but are unwilling to spend or invest. China seems to have done Keynes one better and come up with "The Illiquidity Trap," where excess money creation gets locked up in underperforming assets that require more money creation to stay afloat. That's likely what killed the Soviet Union (OK, there's a long list), which had high Capital Investment with often negative returns.

In China's case, as long as it could export goods to earn "hard currency" (ie, dollars), it could turn the currency it created into something useful (imported goods or exported influence, such as the Belt and Road Initiative). This came at the expense of the ordinary Chinese people (whose labor was undervalued) and to the great gain of the CCP -- whose leaders became wealthy. As China's "Trading Partners in Crime" put up trade barriers, the Illiquidity Trap closes.