Bond

To my surprise, one disturbing component of the budget proposal did not catch very much attention.

Let me explain in a slightly tortuous way:

**********************

I suppose many of you have repeated experience of the nuisance of being called by banks or other Credit Service Company and asked if we are interested in borrow some money.

Similar to the answer of most people, my reply is, as a rule, negative. I am not rich but do not urgently need some cash either. Why should I want to ask for a loan ?

For the same argument, why should our government - in the presence of a gigantic surplus and an astronomical monetary reserve - propose to issue new bonds?

I mean the inflation-indexed bond suggested by a certain Mr. Tsang.

In short, if such a bond is profitable, there would be commercial bankers doing it - and the government should not run a state-owned business to seize the money.

If the bond will lose money and our Mr. Tsang aims to subsidize the citizens (the bond-owners, I mean), why should it be done in the most inefficient way so that a substantial part of the subsides goes to the pocket of the fund manager?

PS. I have no bias against people working in the Monetary Authority. As pointed out by Humphrey Appleby, there are two kinds of fund managers (both private and public sectors): they are either honest idiots or smart crooks.