NOW let's hear it from the other side. While the world's fund managers - or those who follow Barton Biggs of Morgan Stanley - have turned maximum bullish on Hong Kong and China, there are still some who want to see just what the Emperor's clothes really look like. One is Peter Everington, managing director of Regent Fund Management. While Morgan talks the Hang Seng Index up into the high teens, Mr Everington boldly suggests another view. How about up to 12,000 - and then a slump to 5,000 as the collapsing fundamentals of the Chinese economy become apparent and the pressures build in Hong Kong? This near-Doomsday vision, which compares so strongly with euphoria elsewhere, is based on a chain reaction that ends up with Hong Kong's inflation rate going nuclear. First, the Chinese Government further relaxes its squeeze on credit, allowing the huge amount of IOUs with which farmers had been paid for their crops to be bought out. The move is a signal for an opening of the flood gates as urban inflation rockets and the monetary system explodes. Meanwhile, in Hong Kong the arrival of overseas money is helping to expand the money supply, but the strain cannot be taken by the currency because the peg allows so little give in the system. In real terms, interest rates in Hong Kong go to zero (and in theory, but not practice, below), reserves are injected into the Exchange Fund - as has already happened, with the monetary base of Hong Kong expanding by 50 per cent in the past three weeks. The result is exploding money supply, and the strain is taken by asset prices. ''Property prices would elevate by 50 per cent and by this time next year consumer price inflation would be at 20 per cent and rising,'' warns Mr Everington, and invokes the spectre of 1987. ''In effect, the Hong Kong market is in the same position as the US in 1987: the only issue is whether we are in March, June or September.'' The flight out of burgeoning capital balances into stocks and consumer goods sees the Hang Seng Index up to 12,000 before the reckoning in China comes, and the market plunges to 5,000. His may be a small voice compared to that of more famous pundits - but it is not a lone one.