So, here we are again with personal investors dazzled by the blinding spotlight of uncertainty. Equity investments seem to be only for the brave, the freakish spurt in the gold market may have exhausted itself alongside the even more impressive price rises in other commodities. Meanwhile back in the dreary world of bank deposits, it is hard to find an interest rate that even matches inflation yet alone yields a real profit.
No wonder attention is turning to the foreign currency market, where cautious investors can be pretty sure to preserve their capital while enjoying the prospect of making some real gains, however modest.
Governments have been struggling to keep down the value of their currencies as they strive to make their goods and services more competitive in international markets. This has resulted in a scramble to keep interest rates as low as possible but this cannot go on indefinitely; indeed there are signs of a slow emergence from the low-interest era, with China last week again moving to ratchet up the cost of borrowing. The prospect of a change in fiscal policy direction gives investors compelling reasons to pay attention.
Investors in Hong Kong have more pressing reasons than most for looking at foreign currencies because we live in a territory where the government has abrogated its control over the local currency in favour of a fixed link to the US dollar.
There is constant talk of the US currency not only losing its value in comparison with other currencies but of forfeiting its position as the world's major currency. Some views on the fate of the US dollar are both emphatic and extreme. The well known iconoclast investor Marc Faber recently said: 'I no longer regard the US dollar as a valid unit of account.' He may be wrong, but the prudent holder of Hong Kong dollars, which means US dollars, should at the very least be thinking of some diversification.
Although news about foreign exchange trading is generally confined to the back pages of the business press, the forex market is the largest financial market in the world. It is also the world's most liquid and fluid market and trades round the clock. Volumes in this market can amount to a mind-boggling US$2 trillion per day. Hong Kong is a major player in this market and is estimated to be home to the world's fifth-largest forex centre.