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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: IceShark who wrote (84722)	2/21/2000 11:47:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 86076

i know. the rate is fixed. however, it is very easy to attack a fixed rate system. during the Asian crisis, overnight interest rates shot up to over 300%, as hedge funds borrowed HK$ and sold them for US$. the currency board suffered such a drain of reserves that interest rates had to be jacked to the moon. needless to say the Hang Seng was attacked as well, which led to the infamous govt. intervention in the stock market. i think btw. that the U.S. govt. would also entertain intervention in case of a BK.