Agreed, and actually part of that storyline is the fact that there is a massive outflow of capital from China, estimated $1 Trillion cash flowing out of China l

Agreed, and actually part of that storyline is the fact that there is a massive outflow of capital from China, estimated $1 Trillion cash flowing out of China last year (http://bit.ly/1CP8Oj3 http://bit.ly/1CP8Oj3), no doubt to due the people's inability to trust the government. China reported having foreign exchange reserve of $3.6 Trillion, which means that it will run down the reserve to 50% in two years, and even faster if panic helps accelerate the outflow. This places serious doubts on the chinese government to contain any massive deflation to either its stock market, real estate, local government debt, or black market lending using its reserve. EDIT: meant to say 'next year', not 'last year'