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Hong Kong Gold

In full disclosure, I am heavily biased.  Hong Kong is one of my favorite cities in the world.

Remember those ‘7 expat categories?‘ well, I am definitely a mix of several… maybe all. But Hong Kong ticks all the boxes for me, and always has– I’ve been coming here for years and love it more every time.

To give you an example, I like having access to modern conveniences and the availability of goods and services. I like quality infrastructure, beautiful architecture, and a thriving nightlife.

But I also like a little bit of anarchy… a seedy underbelly that makes my spidey-senses tingle… a heavy international flavor where there are people from all over the world dogging it out with each other to come up on top.

To me, Hong Kong has exactly the right blend of the Yin and Yang– order vs. chaos, Wild West vs. City of London.  This stands in stark contrast to the very orderly and somewhat sterile environment of Singapore.

A lot of people fretted when the British gave up control in 1997… 12-years on, however, so far so good. In fact, Hong Kong has vastly improved in many ways. The expatriate community has grown, as has its importance as a financial center.

As an example, my very plugged-in colleague Christine Verone gave me the inside scoop on the gold scene: the local government just recently announced that they were moving gold reserves out of London and into their new high tech vault (located at the Hong Kong International Airport).

According to Christine, this has significant implications for not only Hong Kong, but the entire region: for starters, there is now going to be same-day settlement of precious metal trades in Asian time zones. It also means that Asia will have its own gold ETFs.

The gold facility will clearly support Hong Kong’s rise as a global trading center for bullion, reducing London’s role in storage and settlement.  Similarly, as the CFTC in the United States continues down its over-regulatory warpath, there will be a flood of new business and capital heading east.

Christine’s analysis is spot-on (as it should be given her extensive background in wealth management).  If you look you can see signs everywhere that capital flows and financial infrastructure are migrating to Asia with Singapore, Hong Kong, and Shanghai as the crown jewels.

So why should you be interested in Hong Kong?

1) There are still jobs in Hong Kong (and Singapore). If you’re looking for work and are on top of your game, these are the cities where you need to be looking… and for an internationalist, there is the right mix of opportunity for you and stability for the family to make it a great place.

2) For the pioneer, Hong Kong is definitely one of Asia’s capital cities– and you can bet that the explosive growth of places like Burma, rural China, Cambodia, and Vietnam is going to be ruled from Hong Kong. The city will be a great place to base a business that focuses on these markets.

3) The banking industry hasn’t rolled over and probably isn’t going to with mainland China standing by its side. The West can kick and scream all it wants, but Hong Kong, Shanghai, Singapore, and Abu Dhabi are all standing shoulder to shoulder; this is why the OECD keeps picking on countries like Costa Rica.

Any downside? Of course.

Like Singapore, cost of living can be quite high in Hong Kong– this is not the place to retire on $500/month.

Hong Kong’s currency is still pegged to the US dollar.  Lately the HK dollar appears to be busting at the seams, clutching desperately at the peak-end of it’s allowed trading band with the greenback.  I don’t see any way that Hong Kong can maintain this currency peg, though I regard this more as an investment opportunity than an inconvenience.

The weather is not spectacular (unless you love humidity) and air quality is certainly not the cleanest in the world… though probably not excessively worse than most other major cities.

Tomorrow I am off to Shanghai and will be attending a wealth management conference showcasing the up-and-coming jurisdiction of Labuan. As always, it should be interesting.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • TJ

    Simon I would be interested in hearing more about the landscape of banking in HK. I go twice I year and would like to know more about establishing a relationship there.

  • Captain

    Herr Black — you keep mentioning “nightlife” in your posts. Care to go into a bit more detail as to what that tends to be? Are we talking mainly dance clubs and bars, with lots of young/dynamic people in them? Or are we also talking arts — symphony & other music, dance performances, theatre/performance art? Do you notice any familiar names performing overseas? Notice anything conspicuously missing?

  • campbell evans

    we are a mineral explorer (oil, gas & gold) and have a paleo-placer surface gold mine in a peaceful river valley in Colombia, SA.
    can you direct us to someone who can advise how to raise money via private placement or public offering to monetize and capitalize the initial mining operations? we understand success based finders fee’s and we have a technical report along with a power point to describe the potential
    many thanks for any help

  • GamerFromJump

    I loved Hong Kong when I went there for a study abroad semester. I would be thrilled to go back.

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