Ah, the peg. The dear old peg to the US dollar. Once the envy of Asia, now under attack from all sides. Remember that corny old Rolf Harris song Jake the Peg? (Try not to groan, please.) 'I'm Jake the Peg, with the extra leg,' he sang, recounting the sad, silly tale of the awkward, lonely boy who suffered so much because he was different. It used to drive everyone mad of course; one of those infuriating tunes that would not go away. A bit like poor old David Li Kwok-po, the banker, legislator and director of a million companies, who used to provoke even the normally undemonstrative former financial secretary Sir Hamish Macleod into volleys of sardonic wit with his constant demands that the peg be broken. The peg provided economic and political stability in uncertain times. While other governments had to balance on two spindly legs, Hong Kong had a built-in crutch. The Chinese Government would not have enjoyed the comparison, but Hong Kong had the stability of a three-legged stool. The song has a new resonance now. Mr Li is looking distinctly prescient. If the situation were not so serious, he would be entitled to have the last laugh. That extra leg still gives strength and stability, for sure. Think how quickly Hong Kong would be swept away in the raging floodwaters of the regional crisis if the peg were knocked from under the economy. But the cost of maintaining the peg is higher now than it was when Mr Li was calling for its demise. In those good times, the peg stoked inflation by reducing the Government's control over its own monetary and interest rate policies. Now, as interest rates rise, the peg is a source of deflation. Ah, how lonely the SAR has become. How much like Jake, the outsider. Its self-confidence has been undermined as it tries desperately to defend its peg from the hordes of termites and woodlice gnawing and sawing away at its cracked and battle-scarred timbers. The market bullies are throwing sand in its face on the forex floor then strutting off to steal its girl on the stock exchange. Jake has suddenly turned the tables and won back his beloved, drawing unexpected strength from his hidden reserves. But how long can he keep winning, even with three legs planted firmly on the trading floor? So now the siren voices call for a different solution. If you cannot break the peg, make it stronger. Never mind banging a bit of wood into the topsoil with a wooden mallet. How about iron girders smashed into the granite with a pile-driver? Go for full dollarisation. Swap Hong Kong dollars for their US counterparts in any bank, bar or supermarket at the fixed and unalterable rate of 7.8 to one. Let the Hong Kong currency be no more than a designer dollar, with green, blue, red, brown and yellow notes instead of uniform greenbacks. Bah, humbug! What would that be, but a final, symbolic capitulation to American financial imperialism? Who are these insects boring into the peg, but American hedge-funds and American banks? Should they be allowed to buy a corner of China for a few billion bucks? Week Ending has a far more innovative suggestion. Go for full euro-isation. Snub the Americans. Snub even the old colonial masters. Would it not be a great patriotic gesture to join the European Monetary System as a full member, while the former sovereign power still dithers on the sidelines? Think of the stability this would bring. At a time when the US dollar bounces up and down on the strength of nothing more than Bill Clinton's dalliances with White House interns, the mighty mark and its partners in the euro are affected only by weightier matters - such as the collapse of the ailing Russian economy just up the road. Why not? After all, even in the midst of a recession, Hong Kong meets the criteria (public-sector debt of less than three per cent of GDP; national debt of less than 60 per cent of GDP; fairly balanced budget) better than any of the 11 countries who signed up for the euro in May. It has low inflation, and labour market flexibility to die for. Barring a politically inspired stock market transaction or two, it even has an independent monetary authority, which could easily throw in its lot with the European Central Bank. Truly, the SAR does not quite qualify as Europe. But that is just an artificial, racially motivated geographical distinction. The entire offshore archipelago (including the eponymous Hong Kong Island) is closer to the main body of the Eurasian continent than the UK or Ireland, which do qualify. Kowloon and the New Territories are part of the same unbroken stretch of earth as Germany or France. Besides, Hong Kong hardly qualifies as North America either, does it?