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> Tin Mervin Yeung wrote:
>
> > Hi, Jeff Harteam,
> > As we know, Hong Kong dollar is pegged to the US dollar. (US$1=HK$7.78)One
> > thing that amazed me is that Hong Kong dollar does not crash with Thai
> > Baht. After years of inflation in 1990's, (meanwhile in the US, inflation
> > is low.)
> > Hong Kong dollar should depreciate, but it didn't. I guess the reason is
> > the
> > Chinese government and Hong Kong special area governing body do not want
> > to depreciate Hong Kong dollars so soon after turnover to Chinese rule.
> > I think they are trying hard to defend hong kong dollars. Unless the
> > Chinese
> > government has unlimited (infinite, mathematically speaking) amount of
> > foreign reserve, it is just a matter of time that hong kong dollars will
> > crash.
> > To me, fundamentally, it is such a great trade. I really want to do it.
> > However, I worry that the Chinese government may set up currency control
> > or speculation control when the day comes. It is just impossible in the
> > long
> > run that 2 currencies can be pegged with such different inflation rates.
> > And I believe in Friedman: lax monetary policy is the mother of all
> > inflation. Any thought?
> > The above is my personal opinion. It is NOT a trading advice.
> > Mervin.
>
> Greetings Mervin:
>
> Thank you for your insights.
> Inflation in Hong Kong is a part of life here. This is due to the very fact
> that the Honkies is being pegged to the Greenbag. These are the IMPORTED
> inflation we all have to live with ever since the government decided to peg
> its currency back in the 1970's. I find it quite 'interesting' that you
> compare Hong Kong with Thailand. Now, I've never been to Thailand but my
> mentor had took a short trip there to 'check things out'. Mega malls and fine
> business structures are everywhere in Bangkok. Real estates' prices were
> skyrocketing. The PROBLEM is, these infrastructures are all vacant! The
> general citizens simply do not have the purchasing power for these private
> housings. He came back home and short the Baht with all his mights. When we
> are talking about fundamentals, these are the simple observations that every
> investors will aware. I spend my Christmas every year in the Philippines and
> I have to say I'm getting 'familiarized' with this country. Makati: The
> central business area in the Philippines. Real estates there were
> skyrocketing as well. As I strolled down the streets of Makati, I could
> hardly see or 'feel' any activities going on. Only the rich have the ability
> to participate and enjoy the 'boom' of the economy. The poor will have
> nothing to do with this 'benefits'. Not only that I stayed in the capital, I
> went to the 'provinces' as well. You would see a completely different picture
> here. People's standards of living in the provinces were just pathetic and
> heart-breaking. If I have to use one word to describe this country. It's
> CORRUPTIONS. Even to a layman, it's not hard to see that there is something
> FUNDAMENTALLY WRONG to these countries. When a boom cannot be justified or
> sustained by some fundamentally sound policies, structures, & social benefits
> to its citizens; it is nothing but a bubble.
>
> As to your comments concerning the chinese government speculation control.
> I'll just have to say don't worry about it. We don't have a HONG KONG
> MAHARTIR here.
>
> Finally, everyone knows that Soro is all fundamental when it comes to
> tradings. He rumbled the pesos, he rumbled the ringgits, he rumbled the
> bahts, he rumbled the Singaporean dollars. He rumbled the Honkies but he
> backed off. So, think twice before you short the Honkies. You might as well
> go for the South Korean Wan. Don't ask me why, I don't know. My mentor told
> me that very briefly. Regards
>
> Have a good one
> Jeff Harteam
> Hong Kong
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