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I wrote in April that the economic and social costs of maintaining the Hong Kong dollar’s peg to the US dollar was becoming untenable and may need to be abandoned. The pressure I described has only grown and is now probably greater than anybody outside of the Hong Kong Monetary Authority - which took...

I wrote in April that the economic and social costs of maintaining the Hong Kong dollar’s peg to the US dollar was becoming untenable and may need to be abandoned. The pressure I described has only grown and is now probably greater than anybody outside of the Hong Kong Monetary Authority - which took issue with my original analysis - realizes.

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This is a very thoughtful piece and I agree. We have a large notional short position against the Hong Kong dollar through the ownership of put options. The peg no longer makes sense for Hong Kong and it is only a matter of time before it breaks.