Hong Kong is throwing money away in trying to support local dollar
I could not agree more with Alex Lo that high real estate prices benefit the few but undermine the quality of life for everyone else (“Awash in money, but bereft of good ideas”, May 23). However, Financial Secretary Paul Chan Mo-po is probably congratulating himself that, “Kai Tak record land sale fuels surge in home prices” (May 23).
Our financial departments have become so addicted to land income that they cannot reduce the dosage. Of course our property tycoons are the few beneficiaries of this high land price policy.
We have been told that the high property prices were a factor of the low interest rates in America, and that, due to the dollar peg, we must follow suit.
Retirees who could no longer get any return from their life savings in Hong Kong bank accounts were told, “hard luck, it is out of Hong Kong’s financial control”. It is natural that this easy money boosted property asset speculation. Now US interest rates are rising, and this should cool real estate prices.
But this rates mechanism is being strongly resisted by the Monetary Authority who will not sanction raising rates in line with the US but insists on keeping the easy money tap flowing. It appears they are resolved to protect the tycoons and property speculators.
These officials are not helping the general public but are wasting billions of dollars of public money in a vain bid to support the Hong Kong dollar (“HKMA bought HK$51 billion during 13 interventions to stabilise currency against US dollar”, April 19). It is money down the drain. Have they never heard of King Canute?
I.M. Wright, Happy Valley