On balance, however, most observers reckon the 1983 decision to hitch Hong Kong's currency to the US dollar has worked out well for the city - until now, that is.

Recently, doubts have begun setting in. Following Wednesday's decision by the US Federal Reserve to step up its efforts to revive the US economy by buying Treasury notes - effectively embarking on what has become known as 'quantitative easing', or in plainer terms, simply printing money - there have been some dark mutterings on the millenarian fringes of the financial community that the US authorities are hell-bent on debasing their currency, and that it is time for Hong Kong to abandon the peg.

It is as if Hong Kong were a tiny dinghy hitched to a mighty ocean liner. Now that the liner has run full tilt into an iceberg and is sinking, it is time for Hong Kong to cut the cable or get dragged down into the depths, say the whisperers.

Happily, the millenarians' fears are exaggerated. It is true that the Fed's announcement sent a shock wave though markets on Wednesday. And it can't be denied that the idea of a central bank printing money calls to mind unfortunate images of wheelbarrows full of worthless million mark notes during Germany's Weimar Republic or of Zimbabwe's 10 trillion dollar note. But it does not follow that quantitative easing by the Fed will necessarily lead to a US dollar crash, as the doomsayers predict.

After all, although the Fed has avoided using the term, it actually embarked on quantitative easing last November when it announced its intention to start buying up mortgage-backed securities issued by Fannie Mae and Freddie Mac in an attempt to drive down US mortgage rates.

Despite some gloomy predictions at the time, the US currency did not crash then. In fact, as the first chart below shows, in the intervening period, the US dollar has actually strengthened by about 3 per cent against a broad basket of currencies.

Similarly, five years of printing money by the Bank of Japan in the early part of this decade had little impact on the value of the yen. As the second chart illustrates, the Japanese currency ended the period of quantitative easing almost exactly where it began against the dollar.

Part of the reason that the dollar is unlikely to collapse now is that, for a currency to crash, it has to crash against something. Looking around, there are remarkably few candidates.

With the Bank of England, the Bank of Japan and the Swiss National Bank also busy printing money, the dollar is highly unlikely to collapse against the pound, the yen or the Swiss franc. And with the People's Bank of China determined to hold the yuan stable against the US currency, and even rumoured to be intervening to support the yuan in the face of capital outflows, it certainly isn't going to collapse against the mainland currency.

Of the world's major currencies, that leaves the euro. With the European Central Bank maintaining relative monetary discipline, it certainly looks as if the dollar will weaken further against the euro in the short term following its unprecedented 3 per cent fall on Wednesday.

But with eurozone economies themselves contracting, an outright dollar crash against the euro looks improbable.

In theory, the dollar could also crash against commodities. But with demand for most industrial raw materials depressed, the only commodity the greenback is at all likely to crash against is gold. For a moment on Wednesday, it looked like that might happen, as the price of gold soared by a stunning US$54 an ounce - or 6 per cent - immediately following the Fed's announcement.

But not even the millenarians are seriously suggesting that Hong Kong should peg its currency to gold. It's way too volatile.

So, with a general US dollar crash unlikely, we may as well stick with the greenback. The liner may be holed, but it isn't sinking, and the dinghy is not about to be dragged down into the icy deep, whatever the whisperers warn.