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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (5893)	8/26/1998 1:41:00 PM
From: Brad Bolen	Read Replies (4) \| Respond to of 9980

Kam, RE:You ask such hard questions... Sorry, I don't want to TAX you too much. <ggg> RE: The alternative is that they're setting up to hose the speculators (they take particular delight in the fact that they've been able to do it again and again up to now). In that scenario, the endgame is to wear down the speculators until only the die-hards remain. Then spring the trap and dollarize the economy. This would blow the remaining speculators out of the water as the HK$ and US$ inerest rates rapidly converge and the HSI rallies. Then, of course, just to rub salt into the wound, the HKMA can sell off its stocks and futures at a profit. I am aware of this scenario, but never gave it a realistic chance. The local newspapers seem to love to quote the HKMA bragging about its great efforts to thwart speculators. Your description, however, makes me reconsider whether or not they can actually win. From what I have read, Hedge Funds and their kin will not go down so easily, and they seem to have much more coin to work with. (I think the Forbes article mentioned this). What interests me most, of course, is the affect a deval would have here in the US. From what I gather from your posts, you don't think a recession is likely in the US, and that the likely reaction to devals is will probably be only sympathetic? This surprises me a bit, but the point is well taken. I would love to hear you elaborate on this as much as you feel comfortable. Thanks. BB. P.S. I realize my earlier post sounded personal and I certainly didn't mean it that way. My sincere apologies. (For what it is worth, my cuz is at Harvard) ;-)