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  "documentTitle": "Hong Kong Dollar / Hong Kong Monetary Authority (HKMA) (HKD)",
  "authorId": "01_Pershing_Square",
  "authorName": "Pershing Square Capital Management",
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  "presentationDate": "2011-09-14 00:00:00",
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  "notes": "This appears to be a page from a formal policy proposal or government memorandum regarding currency pegging.",
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      "text": "It is a classical chicken and egg situation.",
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      "text": "16 The recommendation of a US dollar criterion follows from the fact that the US dollar is established as the main benchmark currency in both the markets and in the eyes of the public - as evidenced by the panic of 23/24 September - as the main refuge currency. The days of the Hong Kong dollar's sterling peg appear to be long forgotten and a return might provide ground for political speculation and misunderstanding.",
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      "text": "18 A case can be made for fixing on a trade-weighted basis. This would be both complicated, since the rate against any individual currency would need to be continually adjusted, and unnecessarily refined given the scale of the Hong Kong dollar's recent slide against virtually every major currency. We must seek presentational simplicity. It is also absolutely critical that the rate be regarded as fixed indefinitely. Any statement which can be interpreted as hinting at the possibility of depreciating the announced rate would sabotage the scheme from the outset. It will be acceptable to indicate eventual possible appreciation in the event of confidence returning to such a degree as to produce unduly rapid monetary expansion, but such an indication must carry complete conviction that the rate would only ever be adjusted in that direction.",
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      "text": "17 By linking Certificates of Indebtedness to another currency Hong Kong would be tying itself, once things have settled down, to an arrangement by which domestic interest rates and domestic inflation will be substantially influenced by the behaviour of the economy to whose currency it is tied (the USA in this case). It was, in essence, the potential effect of such ties upon the Hong Kong economy which led to the abandonment of the sterling link in 1972 and then the US dollar link in 1974. One cannot be sure that similar pressures will not develop later under the present proposal, but at this juncture in Hong Kong's history the balance of advantage seems to be firmly in favour of accepting such pressures on the economy as a link to the US currency might bring, as against accepting the consequences of a continuing floating rate, the bounds of which appear to be virtually unlimited. While the fall of the Hong Kong dollar exchange rate mainly results from lack of political confidence, there will be no confidence without a relatively stable dollar. It is a classical chicken and egg situation.",
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      "text": "19 Detailed discussions, both as to the advisability of this scheme and on the mechanics of its implementation,",
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