New risks for the HKD and what you should do now

Sovereign Confidential

Monthly Letter

There comes a time when facts and data should change your mind.

Friends, that time is now.

For several years, I’ve advocated holding Hong Kong dollars (HKDs) as a currency hedge. The HKD has a solid history – a three-and-a-half-decade peg to the US dollar. So, you get all the upside while the USD reigns supreme.

And since Hong Kong’s central bank could theoretically de-peg the HKD from the USD, you get a free insurance policy if the USD tanks.

But now things have changed. The risk of holding HKDs has substantially increased. And I’m singing a different tune.

Look, I’m not forecasting that Hong Kong faces an imminent economic collapse. I’m not 100% certain that anything at all will happen to Hong Kong and the HKD.

I’m simply urging you to diversify out of HKDs into safer cash holdings.

If something happens, you’ll be protected. And if nothing happens, you won’t be any worse off.

Read on to discover the risks I’m seeing in China and Hong Kong, how this may impact Hong Kong’s economy and the HKD and, most importantly, what you can do now to sidestep all these risks.

There comes a time when facts and data should change your mind. Friends, that time is now. For several years, I’ve advocated holding Hong Kong dollars (HKDs) as a currency hedge. The HKD has a solid history – a three-and-a-half-decade peg to the US dollar. So, you get all the upside while the USD reigns…

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