Funny Money in Hong Kong

As we land here at Hong Kong, I am reminded of the fact that the Hong Kongese have funny money. The last time I was here, I picked up a wad of cash at the airport ATM and went merrily on with my day in the city. Later that evening after a good meal at the local dive, as I got ready to pay our bill, I noticed that the money said “Hong Kong and Shanghai Bank Corporation” on it. Now I had gotten my money at the HSBC ATM but surely I expected that the money would say “Reserve Bank of Hong Kong” or “Grand Communist Bank of Capitalist Indulgences” or some such. But no! It said HSBC. And the promise to pay the bearer a sum of HK$ 20, why by the Chairman of HSBC of course. I was convinced now that I had been had. Somehow I had landed in Hong Kong and gotten funny money instead of the real shit. And nothing to be done about it. What’s worse, I had already eaten, and this being a dive didn’t sport the usual Mastercard/Visa signs on the door. Trusting that my countenance betrayed enough innocence, I put my bad money on the tray and waited for my change (wrong move, when passing funny money, pay and bolt). To my surprise, the guy gets me my change, this time with “Standard Chartered” and “Bank of China” emblazoned all over it. Turns out that in Hong Kong, private banks print money. I have no idea how this works. What’s to keep a bank from printing too much to make up for liquidity requirements now that all their subprime loans have gone bad? Nothing we know about private banks over the past 50 years should give us any confidence that when faced with the options of saving their hides and screwing over a country’s economy, they’ll choose correctly. And yet, here we have a prosperous country actually getting away with trusting these fly-by-nights. Weird, very weird.