I believe the number Hongkongers hate most right now is 7.8, the all-too-familiar exchange ratio with the US dollar that the Hong Kong dollar has been pegged to for 28 years. This peg has been the primary culprit for Hong Kong's high-flying inflation lately. The Monetary Authority said last month that it had no immediate plans to get rid of the peg, despite growing calls to end it as the US economy falters.
Nevertheless, people are already moving and hedging. News reports last month said hedge fund manager William Ackman was building a large position in the Hong Kong dollar in a bet that the Hong Kong government would eventually allow the currency to appreciate - rumoured to be by at least 30 per cent - against the US dollar.
However, I have an even bolder plan, one I believe will resonate with a lot of people in Hong Kong. One only has to look at the number of people in Hong Kong who have crossed the border to buy property in mainland cities and now call places like Shenzhen and Shanghai home.
In China's current account balances, there have, in recent years, been foreign exchange influxes that cannot be accounted for by regular trade alone. I suspect much of it can be explained by people abandoning the Hong Kong dollar and opting for renminbi assets via underground channels in southern Guangdong.
So, I say, forget about the peg issue. Why do we need the Hong Kong dollar at all, if people are deserting it in droves? What is the use of a currency whose only function seems to be to make people in Hong Kong poorer every day compared with their northern neighbours, who, by the way, they used to see as their poorer neighbours? Can Hong Kong live without the three banks running meaningless printing presses? When can we finally be rid of the Hong Kong dollar and use the renminbi instead?
Adopting the renminbi as the official currency in Hong Kong has many other benefits, aside from avoiding the slide down the slippery slope into an economic abyss along with the Americans.
First, Hong Kong will be free from the foreign exchange fluctuations that have historically hit the city on and off during financial turmoil. With China's US$3trillion in foreignexchange reserves, no one in the world right now would dare bet against the renminbi.
