The end of the Hong Kong dollar peg becomes a talking point every few years.
The latest talking head is hedge fund manager Buill Ackman, founder and CEO of Pershing Square Capital Management.
He is a smart guy. No question of that. The Reuters report says he betting on an improbable outcome.
- Billionaire money manager Bill Ackman went public last month with his wager that the days of the Hong Kong dollar's 39-year-old peg to the U.S. dollar are numbered.
- Most fundamental analysts say such bets are foolish, pointing to the city's still massive reserves and China's backing.
- But they can be relatively cheap and even profitable regardless of the peg staying intact, and it buys insurance against unlikely but not impossible chains of events, such as a sudden blow-up in China, devaluation or a geopolitical chill.
Kyle Bass bet heavily on the peg breaking back in 2019. For background on how the Hong Kong Monetary Authority defend the peg check out this post:
(ps. It wasn't different)
