Einstein's Theory of Relativity, which was initially published in 1905, said that space and time were interwoven in a single continuum known as space time, but that events could occur at different times depending on the position of the observer.
And I got slightly upset, as in reality Einstein said nothing of the sort. The big fat lie of 'continuous spacetime' was propagated by enemies of Einstein, who thought him to be extremely onerous. The falsity is said to be initiated by Minkowski, one of Einsten's teachers who wanted nothing more than to diminish the accomplishments of his former student.
Minkowski was a medicore mathematician without any proven understanding of relativity or holding significant personal grudge towards Einstein, otherwise he would not advocate the big fat lie of 'continuous spacetime' as an accurate description of physical reality, a falsity which to this day prevents most honest people from understanding the simplicity of relativity, understanding time and understanding how to refute the 'shrinking space' bullshit stories sold by some in the academia ;]
Einstein on the other hand was no Jesus and he despised 'continuous spacetime' proponents greatly for their basic lack of understading what general relativity means. During the later part of his life he became a bitter sociopath, misunderstood and neglected by main stream physicists, observing the beginnning of the rule of mob in aceademia gleefully described in main stream media as peer revieved science. Current circle of mutual admiration causes the spinning of the likes of Copernicus and Galileo in their graves and I bet the irony is not lost on Einstein either.
Some strange things happen when you start to travel that fast. Firstly, time slows down. Second, Santa gets squished which means that he can fit down a chimney more easily.
This collision scenario only works the way desribed if you are stuck in pre-Copernicus state of mind and cannot fathom a different point of view. From the point of view of Santa, nothing gets squished, it is just that everything around him is changing very slowly, as his personal, or as physicists would say - local, rate of change in space is tremendously high. Santa always takes up the same amount of space, but because of doppler effects he will appear as being shorter for a distant observer. Who will eventually observe the big bang as Santa collides with brick and mortar observer. I bet the irony is not lost on Zeno, of the paradox fame.
In reality time is not an object nor part of space time, it is a relation between change occuring in distant space and point of view in space. While space is continuous in the sense that Planck's lenght does not exist, time is not part of space in any objective sense, it is a relation between objects in space. Change however, is atomic and follows the basic and distinct three-state logic of objective base reality. The act of observation is always atomic, never continuous, by the very definition of what observation is.
Time is the illusion at point of view, subject to doppler effects as the information about change at distant point propagates through space. Please stop fooling people with the 'shrinking space' lie, it is the time illusion which shrinks, and the illusion only works for distant observer and not at all for the Santa. It 'works' until the inevitable collision, that is.