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USDHKD peg under pressure

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  1. #11

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    Quote Originally Posted by jw1701
    The difference between now and 1997 is the amount of mainland assets washed and parked in HK, the risk to the peg is any gov move to try and bring these back to the mainland which sparks contagion as people try to get them further away from Chinas reach (such as into USD assets)

    Heavy falls in stocks or property in HK also a risk
    But what probability would you assign to those risks in say the next three years, or ten years?

  2. #12

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    The morons in charge of our "monetary policy" should just match interest rates instead of burning cash for nothing.


  3. #13

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    Quote Originally Posted by mrgoodkat
    The morons in charge of our "monetary policy" should just match interest rates instead of burning cash for nothing.
    In practice they can't. Explanation here: https://www.bloomberg.com/news/artic...-peg-quicktake
    mrgoodkat and Drunken Master like this.

  4. #14

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    Quote Originally Posted by hullexile
    But what probability would you assign to those risks in say the next three years, or ten years?
    Would put higher probability in next 3 years vs 10

    Bond yields are an interesting correlation

  5. #15

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    Quote Originally Posted by jw1701
    Would put higher probability in next 3 years vs 10
    I am trying to get my head around that. Something is more likely to happen sometime in the next three years than it is sometime in the next ten?
    coffee_break likes this.

  6. #16

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    Quote Originally Posted by traineeinvestor
    In practice they can't. Explanation here: https://www.bloomberg.com/news/artic...-peg-quicktake
    No reason they can't tighten the monetary system with other measures than the over night offered rate. Asking banks to hold more reserves against loans written is an obvious solution that should be within the remit of HKMA.

  7. #17

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    Quote Originally Posted by TheBrit
    No reason they can't tighten the monetary system with other measures than the over night offered rate. Asking banks to hold more reserves against loans written is an obvious solution that should be within the remit of HKMA.
    We are all foreigners here, but they actually have their own economy to look after.

    Overnight hiking hurts that.

  8. #18

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    Quote Originally Posted by GentleGeorge
    We are all foreigners here, but they actually have their own economy to look after.

    Overnight hiking hurts that.
    Yeah, let's print almost free money into perpetuity, I can't see any issues with that ever hurting the economy.

    Regardless or whether you think low interest rates are right or wrong, I was just pointing out they do have options to converge local rates to the Fed Funds rate if they wanted to.

  9. #19

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    Quote Originally Posted by TheBrit
    Yeah, let's print almost free money into perpetuity, I can't see any issues with that ever hurting the economy
    There is a whole body of economic study (Modern Monetary Theory) that says we really shouldn't worry about printing money into perpetuity

    Not entirely saying that I agree...

  10. #20

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    I wonder what it costs him (Kyle Bass) to put on these bets - they don't necessarily come true, but huge payout if they do.

    Not the best impression to see him next to Steve Bannon, but he is a smart guy, and does have to good points. HK has had an inflow of capital over the years - from China and abroad. That will likely reverse. It's not the safe haven it once was.

    Extradition treaty with the mainland, end of US-HK free trade act - it could happen a lot sooner than 2047.

    https://www.zerohedge.com/news/2019-...litical-crisis


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