>Let's get one thing straight Mr. Kam. No one is making up #'s. I read as much as I can and the 20% HK reserve depletion figure is from bridge news, reported in the middle of last week. Here's where you're being mislead: The exact total of foreign reserves that HK has is $US160B. That's exact.
You're a blast. Provide one hyperlink that says that HK ate 20% of their reserves. You can't do it. It didn't happen.
But of course, you can't help yourself. Now I have to disabuse of you two silly notions.
#1) The HKMA did not piss off 20% of their reserves. It's always been around $100 bil.
info.gov.hk
#2) HK never had $160 bil of reserves. So I was scratching my head wondering from which orifice you pulled that number out of. I clicked on your profile looking for a clue, but all I found there was a link to America Free Radio. Finally, you provided the answer, by providing a link from which your opinions seem suspiciously derivative of:
afr.com.au
Oh wait a minute. That's an Australian web site. So I converted $160 bil koalas to good old greenbacks. Want to guess what number I got?
In any case, you continue on with an incredibly naive circumlocution about how hedge funds have basically unlimited credit to break the HK bank. Nice try junior. Venally or ignorantly, you forget that credit comes at a price, interest. So what happens is that selling HK$ drives up interest rates, which makes the currency more attractive to other buyers, usually also hedge funds. Currency boards are actually quite beautiful systems in their simplicity, symmetry, and effectiveness. But I'm sure you're not convinced. Fine. Why don't you short me the HK dollar equivalent of $5000? I'll let you off the hook when you get tired of paying me 12% per annum.
Should the HKMA buy the Hang Seng to prop it up? Should the Fed buy Yen to prop it up? If you're a purist, you say never, never. But in real world, it happens. Even so, it's a drop in the bucket. |
