Having too much money is a problem most of us are unlikely ever to complain about. In fact, it's a fair bet that to many of Hong Kong's population, the words 'too much money' are incomprehensible. Certainly, anyone complaining that their wallet is too fat is unlikely to elicit much sympathy from the general public. But too much money is exactly what the Hong Kong economy is suffering from right now, and there's very little we can do about it. In recent months, an unprecedented influx of cash has flooded Hong Kong's financial system, doubling the city's monetary base to more than HK$800 billion, driving the stock market up 100 per cent and lifting property prices by almost 30 per cent. That might sound grand, but the government is worried. On Friday, the Hong Kong Monetary Authority raised the minimum down-payment on flat purchases of more than HK$20 million from 30 per cent to 40 per cent in an attempt to prevent a bubble inflating at the luxury end of the market. Hong Kong isn't alone in its concerns. As the rich world's central banks have flooded their financial systems with cash in an attempt to stave off depression, liquidity has cascaded into developing economies' asset markets in massive quantities. Last week alone, a hefty US$4.9 billion flowed into emerging-market equity funds monitored by specialist research house EPFR Global, bringing net inflows for the year so far to US$50 billion. And that captures only a fraction of the short-term capital that has flooded into emerging markets from Latin America to Asia this year. With the threat of destabilising asset bubbles and higher inflation mounting, governments around the world are being pushed towards drastic action. Last week, the Brazilian authorities slapped a 2 per cent tax on foreign investment in the local stock market in a bid to quell hot money inflows, which Morgan Stanley estimates hit US$20 billion in the third quarter. Following an influx into Asia of hundreds of billions of US dollars over the past few months, speculation is now mounting that Asian governments may be forced to impose similar capital controls. Whether restrictions on hot money flows would work is doubtful. Last week's measures failed to dampen enthusiasm for Brazilian assets. And Thailand's attempts to control inflows in 2006 and 2007 were a dismal failure. But Asian governments may see capital controls as a more attractive option than letting local currencies rise on the tide of inflows. Currency appreciation might draw even more hot money from investors looking to capture foreign exchange gains, exacerbating the original problem. And Asian governments will be reluctant to allow their currencies to rise significantly in value as long as Beijing keeps the yuan steady against the US dollar, lest they lose competitiveness against China. Of course, for Hong Kong, neither capital controls nor currency appreciation is an option. Free capital flows are written into the Basic Law, while our currency peg precludes exchange rate adjustments. As a result, the government is restricted to administrative measures like last week's cap on luxury mortgages in its attempts to rein in asset markets. Whether its efforts will be successful is another matter. Figures from the HKMA show that new mortgage approvals fell steeply in August compared with the previous month, indicating that surging prices at the top end of the market are not being driven by easy terms for home loans. That makes sense. Luxury flats are being snapped up largely by mainland buyers eager to get their money offshore. For the most part, they are cash buyers who do not need Hong Kong mortgages. As a result, last week's restrictions are unlikely to have much of an impact. There are other things the government could do. It could increase the land supply or raise stamp duties to discourage speculation. But ultimately, there is little Hong Kong can do but go with the inflow, and suffer all the disadvantages of having too much money.