You should be able to find a RV interview with Kyle Bass, recorded a few months ago, who talked at length about this subject. He said then that HK had burnt through a large portion of its reserves, defending the currency, and argued (then) that it was only a matter of time.

Yes I saw it. At the time of recording the dollar was getting stronger. Now it got down again. Where did hong kong get the dollars from to keep defending it?

..and one more thing; I do not understand why the 'bail out' does not contain grants to small business. Forget loans! Why would you accept a loan to tie you over a period with near zero revenue? The consequence is that you exit this period in the same of worse shape than before. Plus, like you guys observed, these loans needs processing and everything is slowed down tremendously. It might be too little, too late for many businesses. This is not good.

If you look at the timing of the crash, it doesn't coincide with anything except various sentiment metric reporting high fear. The public lags way behind what academics know of the pandemic. (By public, I especially include US/Canadian politicians and business leaders.) People still haven't caught up to the latest scientific analysis on how long this is going to last and therefore the economic ramification. Will fear go back up again as people realize how bad it is (therefore causing a second crash) or will people get accustomed to the bad situation and be content with govt stimulus packages (therefore allowing a gradual recovery with Feds' blessing)? Who knows.

As for your loan comment, what's the alternative? Give up all your existing capital investment and close down for good while eating that loss?

Yeah, you're right...stuck between a rock and a hard place. One can only hope that this crisis will pass soon and that entrepreneurs somehow can finetune their business to access different revenue streams or find other ways to stretch out the available finances to keep going. In the end you might have to accept the loan to tie you over, but then I think there should be a program to either entirely or partially forgive it or at a min. create favorable payment conditions. My brother has a small business and he is trying to navigate a path through the current crisis. Not easy. At some point it needs money, no matter how creative one gets.

Rock - Hard Place - also in the UK : https://www.bbc.com/news/business-52158029

Known by whom? You? Chinese reported death rate isn't particularly low.

Those foreign countries hold those Treasury’s to back there currencies with, so selling them in order to get dollars at best will be net neutral at worst net negative.

Hi Garo - many of these dollars are held as a result of trade in USD: e.g. sell oil (or manufactured goods) in dollars and recycle excess dollars into Treasuries. Many countries will want to hold these dollars for future international transactions. The Fed has also opened up a repo operation specifically to help foreign and international monetary authorities (FIMA) swap TSY for dollars and there have been some very significant liquidations already. Despite this, plus dollar swap lines in place with global central banks and the Fed's balance sheet expansion of $1.65 trillion since the beginning of March, the dollar index (58% euro, 14% Yen and 12% GBP) is relatively unchanged and JP Morgan's EMFX index nudged a new all time low yesterday (USD strength), which indicates the size of the problem/dollar shortage when global transactions (in which the dollar dominates) suddenly dry up.

Hi guys, re FIMA repo, the interest rate is pretty high (always 0.25% over IOER) for swapping us-T for dollar using that facility. Why would countries not sell their us-T holdings instead of swapping?

Yes. It’s the Book of Common Prayer.

Apologies for the typo but it should have been 3/20 rather than 3/30.