In today’s Fat Tail Daily, for many years, I could buy everything for cheap in Hong Kong. Now, this is no longer the case. It was quite a shock I must say. Now that mightn’t be noteworthy to you. After all, inflation is everywhere. Even our politicians and economists tell us we should just live with it, right? Not so…
Greetings from Hong Kong, the Asian city where east meets west!
I want to share some reflections from my trip so far (it’s only been a day!).
I was born in Hong Kong, lived there for a few years before migrating to Australia in 1989. Since then, I’ve flown back several times to visit my relatives as that’s where most of them live.
The last time I came here was in October 2018, and before my son, Cyrus, was born.
Much has happened in Hong Kong since I last visited.
We’ve watched on TV the protests that turned violent in 2019.
Then came the Wuhan virus outbreak. Hong Kong experienced one of the longest and harshest control measures, almost rivalling Victoria.
Things have now returned to normal, somewhat. But I can sense that some things aren’t the same…
Off to a good start
Our trip started well.
The flight to Hong Kong was quite long — just under nine hours.
I can tell you I didn’t look forward to it. Long flights in a stuffy cabin with insufficient oxygen usually leave me feeling half-dead.
The good news is that this flight was an exception. Let me show you some photos.
This is one with my son:
Source: Brian Chu
Here’s another with my wife, Cindy, and Cyrus having their lunch:
Source: Brian Chu
After touching down, we picked up our luggage, and met up with my brother-in-law. We took the taxi to his place, which is in the west of the New Territories.
The trip would normally take 45 minutes to an hour. However, the Hong Kong government built a tunnel from the airport to the suburb in 2020. It cut the travel time to 20 minutes!
Amazing, isn’t it?
Witnessing the legacy of the failing fiat currency system in action
Before 2019, I used to travel to Hong Kong every one to two years. Each time I travelled there, I marvelled at how quickly things would develop.
There’d be new roads, tunnels and train lines to turn a vibrant city into an even more compact community. You can literally travel from one end of the city to another in just over an hour.
(We’ll travel to Macau next week via the Hong Kong-Zhuhai-Macau bridge. It’s currently the world’s longest road and tunnel system extending 55 kilometres across the Pearl River Delta. I’ll share some photos of that.)
Those who have visited Hong Kong will understand how it’s a city of contrasts. The wealth disparity is evident. There’s a huge contrast between the bright lights, skyscrapers and luxury apartments in the Central and Mid-Levels district and the residential suburbs…complete with the old, rundown shacks in the hillsides and outskirts.
Yesterday, I was shopping in the local street markets.
Here’s a photo of a local butchery (notice they hang the meat out in the open without refrigeration, something that wouldn’t pass our health requirements!):
Source: Brian Chu
Pork ribs were selling at HKD36 a catty (around 600 grams), which is equivalent to AU$12 a kg. Pork pieces were selling at HKD12 a catty or AU$4 a kg.
Here’s another photo of me at a local grocery store:
Source: Brian Chu
I also grabbed two 440mL cans of Hoegaarden beer at a 7-11 convenience store for AU$2 each!
But that’s where the bargain prices seem to end.
For many years, I could buy everything for cheap in Hong Kong. Now, this is no longer the case. It was quite a shock I must say.
With fresh fruits and vegetables, desserts, dining out and most other goods, I’m paying Sydney prices.
Now that mightn’t be noteworthy to you. After all, inflation is everywhere. Even our politicians and economists tell us we should just live with it, right?
Salaries and wages for the ordinary Hong Kong resident are much lower than in Australia. I’m not talking about expatriates and those in the upper class who earn more than most. They can live like kings in Hong Kong, complete with au pairs, chauffeurs and multiple residences.
Currently, the average annual income in Hong Kong is around HK$300,000 or AU$60,000, based on Numbeo. A one-bedroom suburban apartment costs AU$32,000 a year to rent. This is more than half the average income!
If you think paying your mortgage is tough, Hong Kong residents will tell you to hold their beer.
My awakening a decade ago
I could still remember it was exactly a decade ago that I was walking downtown in the suburb where I grew up.
There were plenty of streetside stores selling fresh food, meats and assorted items. Much like the markets I walked around today.
Back then, I was single and earned a relatively solid income as a university lecturer.
But as I looked at the property prices in the real estate agencies, my heart started to sink. I realised that I would struggle to afford a place in the downtown area!
That began my awakening. Inflation and bad financial management by our leaders had been robbing us silently.
I needed to do something to combat it.
Fortunately, at that point I had already learned about the secret of gold, and was starting to build a portfolio of gold stocks to try to fast-track my wealth accumulation.
And you know the rest…
Gold providing stability in a changing world
Ten years on, we can see how the challenges are escalating.
Inflation is running wild.
Government officials are now more corrupt and self-serving.
The world is destabilising.
But some things haven’t changed.
Like gold and its ability to retain its purchasing power.
And gold stocks being able to multiply gold’s moves.
We’ve gone through some tough tests these past two and a half years.
But things are turning around in gold’s favour.
And gold stocks are fast setting up for a rally.
Remain patient and stay hopeful.
Editor, Fat Tail Daily