SOME READERS OF this column tell me that if their first glance shows them big financial words such as balance of payments or gross domestic product, they say: 'Ah well, perhaps another day. Let's see what's happening in the Kissel trial.'

Bear with me, Stuart. This one is about balance of payments but it is also about a prize piece of government nonsense and I shall try to explain it as simply as I can.

In the excerpt above, Ms Chan was talking about something called the Capital Investment Entrant Scheme whereby we allow foreigners to live in Hong Kong if they invest at least $6.5 million here. So far, 439 new arrivals under this scheme have brought more than $4 billion with them. Let us all rejoice.

Now imagine someone living abroad who has never been graced with a Hong Kong ID card but has dreamed all his life that the gates of Paradise might open to him some day. Great is his joy when he realises that the $6.5 million he has in spare cash can make Paradise his at last.

He has a slight problem, however. He lives abroad and owns no Hong Kong dollars. His money is all in the currency of the country in which he lives. If he tried to pay for daily necessities with Hong Kong dollar bills in his country he would be told to put them back in the Monopoly box.

How can he then find the Hong Kong dollars that he will need at the gates of Paradise?

To solve this puzzle he goes to a bank branch where he is told that it is no problem at all. The bank will take his currency and convert the money to Hong Kong dollars for him.

It will even spare him the trouble of carrying cash. It will make a wire transfer of the money to an account it will open for him in its branch in Hong Kong and all he need carry with him to Paradise is a certificate attesting to the transfer.

But where does his bank then find his Hong Kong dollars? Get ready for an astounding revelation here.

The bank finds them in Hong Kong. What it does is transfer the money from one account in Hong Kong to another account in Hong Kong, the one he has just opened. Meanwhile, it takes the foreign currency from his account in his own country and transfers it to another account in that country.

So here is the big question for you, Ms Chan. How many more Hong Kong dollars does this bring into Hong Kong?

You have it - zippo, zilch, nada, none in any way. Welcome to your first lesson in the balance of payments. When you take money from your left pocket and put it in your right pocket you are no richer at all.

The most that our seeker of Paradise has done is to initiate the transfer. This means that he, or rather his bank, bids for Hong Kong dollars, which, in the ordinary course of events, would put upward pressure on the Hong Kong dollar and make it strengthen relative to other currencies.

But it cannot. The Hong Kong dollar is firmly pegged to the US dollar, which means it cannot strengthen except within a narrow band. All that the bidding for Hong Kong dollars can possibly do to affect the equation (and it would take many more than 439 new arrivals to do it) is make our monetary authority issue more of them.

This would have the effect of bringing down interest rates at a time when authority chief executive Joseph Yam Chi-kwong would rather see them go up. We have government at cross-purposes again.

Of course, there is also the argument that what we are really trying to do with this scheme is bring in bright new talent to ease the problem of an ageing population and maintain Hong Kong's economic vitality.

Great idea but once again we have a problem. Leave alone the fact that anyone with an idle $6.5 million is likely to be both older and idle himself, the rules of the scheme rule this idea out.

Look it up on the Immigration website - 'The objective of the scheme is to facilitate the entry for residence by capital investment entrants, i.e. persons who make capital investment in Hong Kong but would not be engaged in the running of any business here.'

And if it is thus only their money we want and not their business acumen, we get back to another fundamental question. Do we really need their money when we already have such a surfeit of it that our economy is based on shipping the stuff out to foreigners rather than shipping it in from them?

What we have once again is a case of civil servants rushing in without thinking where economists think twice before they tread. Balance of payments is not really such dry stuff at all, Stuart. It gets me plenty of giggles.