The $23 Trillion Credit Bubble In China Is Starting To Collapse Global Financial Crisis Next?Michael Snyder Since Lehman Brothers collapsed in 2008, the level of private domestic credit in China has risen from $9 trillion to an astounding $23 trillion. That is an increase of $14 trillion in just a little bit more than 5 years. Much of that hot money has flowed into stocks, bonds and real estate in the United States. So what do you think is going to happen when that bubble collapses? The bubble of private debt that we have seen inflate in China since the Lehman crisis is unlike anything that the world has ever seen. Never before has so much private debt been accumulated in such a short period of time. All of this debt has helped fuel tremendous economic growth in China, but now a whole bunch of Chinese companies are realizing that they have gotten in way, way over their heads. In fact, it is being projected that Chinese companies will pay out the equivalent of approximately a trillion dollars in interest payments this year alone. That is more than twice the amount that the U.S. government will pay in interest in 2014. As with all other things in the financial world, what goes up must eventually come down. And right now January 31st is shaping up to be a particularly important day for the Chinese financial system. The following is froma Reuters article If there is a major default on January 31st, the effects could ripple throughout the entire Chinese financial system very rapidly. A recent Forbes article explained why this is the case The big underlying problem is the fact that private debt and the money supply have both been growing far too rapidly in China. According to Forbes, M2 in China increased by 13.6 percent last year Overall, M2 in China is up by about 1000 percent since 1999. That is absolutely insane. And of course China is not the only place in the world where financial trouble signs are erupting. If current trends continue, many other big banks will soon be experiencing a bond headache as well. At this point, Treasury Bond sentiment is about the lowest that it has been in about 20 years. Investors overwhelmingly believe that yields are heading higher. If that does indeed turn out to be the case, interest rates throughout our economy are going to be rising, economic activity will start slowing down significantly and it could set up the nightmare scenario that I keep talking about. But I am not the only one talking about it. In fact, the World Economic Forum is warning about the exact same thing So will a default event in China on January 31st be the next Lehman Brothers moment or will it be something else? In the end, it doesnt really matter. The truth is that what has been going on in the global financial system is completely and totally unsustainable, and it is inevitable that it is all going to come horribly crashing down at some point during the next few years. It is just a matter of time. This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. 