Wednesday, May 20, 2009

$2,000,000 for cup of Starbucks Coffee in Hong Kong!

Hey! What’s happining here? I thought we were in the middle of a global credit crisis.

But, it’s true my friends. According to a news story in CNBC this morning, HSBC, Hong Kong’s largest lender with more than 2 million retail customers, has cut the interest it will pay on HK Dollar deposits by some 90%... to almost nothing.

CNBC anchor Emily Lau has calculated that you’ll need to have HK$2,000,000 on deposit with HSBC, for a whole year to earn the miserable HK$20 it costs to buy a small cup of coffee at Starbucks.

Accoding to the news report, HSBC has come to this decision because there’s too much cash in Hong Kong. They call it Hot Money. Aparantly other banks in Hong Kong are considering cutting interest rates as well. HSBC is usually the leader in such matters.

So how does this happen when we are supposed to be in a middle of a global financial crisis?

I think maybe it’s because the HK Government has been pumping liquidity into the banking system.

So what’s an ordinary person expected to do to earn a fair return on their savings? Email me your thoughts at

Bookmark and Share