Hello Mr. Blonde:
Pardon the delay in answering. I had some surgery & have been out of touch for about 6 weeks.
Sounds like you received a correct answer. One of the reasons I personally started investing in Hong Kong is
the fact the Hong Kong dollar is tied to the U.S. dollar.
Since 1985 I've never seen the exchange rate vary by more
than 1 U.S. penny, either way. The Hong Kong dollar stays
around U.S. $0.125 I don't monitor it intraday, so it may vary more than one cent, but I've never noticed it.
Awhile back, there was some talk in the HK publications
about possibly un-linking the HK dollar from the U.S. dollar. I wrote a letter to the editor of the South China Morning Post, which they published. (I was honored, even if it was just the online edition.) My personal preference was in favor of breaking the link. My rationale was the HK economy had the potential to grow at a faster rate than
the U.S. economy. Thus, the HK dollar would become stronger
if not tied down by U.S. (and Alan Greenspan's) idea that
4% represented "maximum annual sustainable growth". Hong Kong is the funnel that feeds China's enormous appetite
for goods & services. As China moves forward, HK moves forward. A company that is in an earlier stage of technological development than the U.S. certainly has the potential to sustain a higher annual growth rate, simply because they have more growing to do.
That's the abriged version, but I'm sure you get the idea.
Please understand I am in NO WAY implying HK investing is riskless. There is political risk, and all of the market
risks associated with investing in any stock market. If anything the stock market risks are amplified in HK, because their market tends to be more volatile.
Hope this helps.
Regards,
Doug |
