Hong Kong Cashes in

its unique advantages, its secret admirer.

‘Neutral’ Switzerland pledges more cooperation with NATO. Swiss defense chiefs are pushing for closer ties to Western powers, amid warnings that the country’s neutrality is at risk; Switzerland imposes the EU’s eleventh package of sanctions on Russia, a month after freezing billions in Russian funds, ending centuries of Swiss independence; Swiss seek closer defence ties to EU, NATO. Switzerland will seek closer defence and security ties to the European Union and NATO ..

The US has enough dirt on the Swiss elite to jail them for life. If Switzerland wants to follow Germany and destroy its most valuable industry to please America, who are we to complain? But the smart money is moving beyond the reach of Uncle Sam’s long, confiscatory arm.

Whither can smart money fly? And how?

The HKSAR is the largest offshore yuan business hub in the world. As of end-March 2023, yuan deposits (including certificates of deposit) and outstanding yuan loans amounted to 950.6 billion yuan and 245.4 billion yuan respectively, increasing by 17.6 percent and 37.9 percent year-on-year. Around 75 percent of offshore yuan payments are processed in Hong Kong, official data showed.”

RMB internationalization is going full throttle. From January to September in 2023, the yuan cross-border payments reached a whopping 40 trillion yuan, a 24% year-on-year hike. At the same time, the proportion of yuan cross-border payments in the total cross-border payments in both national and foreign currencies for trade of goods was 24.4%, marking a 7% year-on-year increase.”

Washington controls offshore banking in Switzerland, London, Singapore, the Bahamas and the Channel Isles and the EU, so where can harried billionaires stash their doubloons without fear of expropriation or extortion?

Hong Kong. Where else?

Hong Kong will be the world’s leading offshore money center by 2030. If that sounds hyperbolic, consider this:

• The birthplace of HSBC, it’s been an international banker for 186 years.

• Its 163 banks, most in the Global Top 100, its British commercial judges and legal system, honest regulators and efficient police make it an attractive jurisdiction.

• It’s part of the Greater Bay Area¹, the world’s science and technology epicenter. By 2026, its GDP will be $2.8 trillion. That’s more than Canada’s.

• Hong Kong’s Top 100 Universities outnumber all world cities’.

• Hong Kong’s bankers handle Hungarian and Pashto with equal aplomb.

• Hong Kong’s harbor, restaurants and amenities are among the world’s finest combination of oriental exoticism and occidental language and law. A marriage made in Heaven.

• Hong Kong’s population has returned to normal and unemployment is 2.2%.

• Hong Kong can invest directly into the PRC, the world’s biggest, fastest growing economy, where even foreign firms’ ROI averages 9% annually.

• The US has zero visibility into Hong Kong.

• Hong Kong is the epicenter of international central bank digital currency settlements: it is home to the platform, mBridge, that exchanges your country’s CBDC for mine and bills or pays each of us in our own currency. In seconds.

mBridge over troubled waters

In a recent post, the Bank of Hong Kong was still developing the mBridge CBDC global exchange, under the auspices of the Bank for International Settlements. Since then mBridge’s trial group – the Central Banks of Thailand, China and the UAE – have facilitated $564 billion in trade and announced plans to take mBridge live in September from its world headquarters in the Fragrant City.

Central banks will then begin settling up for imports and exports with their native CBDCs, avoiding US Treasury oversight, SWIFT’s fees, the City of London, Frankfurt, Paris and Wall Street.

Now we know

Since CBDCs became a thing, more and more little countries have been issuing them, though folks were happy with cash and debit cards. CBDCs seemed beyond their technical capacities. I suspect that an advance team from mBridge had visited them, explained its benefits. All they had to do to join the party was plug in the secure terminal and use the supplied software template to add local branding and color. Today, countries generating 90% of global GDP have issued CBDCs.

Who is Hong Kong’s secret admirer?

Who had the foresight, money, stature and energy to build – from scratch – a global exchange capable of securely swapping dirhams for pesos in milliseconds for thousands of clients simultaneously while under constant US attack?

A clue from in 2009: “The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies”.

mBridge isn’t it, of course, but it’s a step in that direction. Once it’s running smoothly, introducing an ‘international reserve currency disconnected from individual nations’ will be much easier.

A further clue: our prime suspect will be headlining China’s $16 trillion Sovereign Wealth Fund Global Advisory Council meeting in Hong Kong on September 19. He is, of course, Zhou Xiaochuan, the visionary former Governor of the PBOC, the world’s richest central bank. Only Zhou had the foresight, brains, motive, means and opportunity to pull off a really big caper like this..

1. Hong Kong, Macao, Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing.