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  • UN Says Dollar could collapse.

    U.S. dollar could 'collapse': UN
    Patrick Worsnip, Reuters: Wednesday, May 25, 2011


    UN economists have for some time queried whether the dollar should continue to be the world’s sole reserve currency. Others have also expressed concerns about U.S. finances.
    Photo Credit: Nicky Loh/Reuters, Nicky Loh/Reuters
    UNITED NATIONS – The United Nations warned on Wednesday of a possible crisis of confidence in, and even a “collapse” of, the U.S. dollar if its value against other currencies continued to decline.

    In a mid-year review of the world economy, the UN economic division said such a development, stemming from the falling value of foreign dollar holdings, would imperil the global financial system.

    The report, an update of the UN “World Economic Situation and Prospects 2011” report first issued in December, noted that the dollar exchange rate against a basket of other key currencies had reached its lowest level since the 1970s.

    This trend, it said, had recently been driven in part by interest rate differentials between the United States and other major economies and growing concern about the sustainability of the U.S. public debt, half of which is held by foreigners.

    “As a result, further (expected) losses of the book value of the vast foreign reserve holdings could trigger a crisis of confidence in the reserve currency, which would put the entire global financial system at risk,” it said.

    The 17-page report referred at another point to the “still looming risk of a collapse of the United States dollar.”

    Rob Vos, a senior UN economist involved with the report, said if emerging markets “massively start selling off dollars, then you can have this risk of a slide in the dollar.

    “We’re not saying the collapse is imminent, but the factors are further building up that we could quickly come to that stage if other things are not improving quickly on other fronts — like the risk of the U.S. not being able to service its obligations,” he told Reuters.

    UN economists have for some time queried whether the dollar should continue to be the world’s sole reserve currency. Others have also expressed concerns about U.S. finances.

    Standard & Poor’s threatened on April 18 to downgrade the United States’ prized AAA credit rating unless the Obama administration and Congress found a way to slash the yawning federal budget deficit within two years.

    A downgrade would erode the status of the United States as the world’s most powerful economy and the dollar’s role as the dominant global currency.

    Treasury Secretary Timothy Geithner said on Wednesday the U.S. government would “never default on its obligations.”

    ASSET BUBBLES

    Assessing the broader global economy, the UN report said recovery from the 2008 financial crisis continued to be led by China, India and Brazil, but that their growth outlook was moderating due to fears of inflation and domestic asset price bubbles.

    It took a slightly more optimistic view of world growth prospects than it did six months ago, forecasting 3.3% expansion this year and 3.6% in 2012, compared with 3.1% and 3.5% respectively.

    The United Nations uses a different exchange rate calculation than the International Monetary Fund and the Organization for Economic Cooperation and Development, making its global growth figures slightly lower.

    It boosted its forecast for U.S. gross domestic product growth this year from 2.2% to 2.6% but kept next year’s estimate steady at 2.8%.

    The report cut Japan’s growth outlook this year by more than a third to 0.7% following March’s catastrophic earthquake, tsunami and nuclear plant crisis. It put damage to buildings and infrastructure at about 25 trillion yen (US$305-billion) or 5% of GDP.

    Despite a recent surge in oil prices, it predicted that barring major disruptions from political unrest in the Middle East, they would level off at an average $99 a barrel this year — close to the price of U.S. crude on Wednesday — and fall to an average of US$90 next year.

    “Supply and demand conditions do not warrant a continued upward trend,” it said.

    Food prices have also been soaring but the report said better harvests were expected to moderate them in the second half of this year.

    © Thomson Reuters 2011


    © Copyright (c) National Post


    Read it on Global News: U.S. dollar could 'collapse': UN

  • #2
    Yeah, everyone says the dollar could collapse.
    Forbes put out that with in 5 years we will be going back to the gold standard.
    I'll keep my guns, freedom, and money... YOU CAN KEEP THE "CHANGE"!

    Comment


    • #3
      yeah Gold standard.

      Truth is, till products are priced reasonably and the whole Credit system is done away with the US economy will keep staggering on with mini recessions and Depressions. to full blown recessions and depressions.

      on average a third to a half of what is claimed as Profit by major corporations is Credit, money that they are owed. but has not been collected. but this bit of legal fiction keeps their stock prices up while trading.

      truth is if prices were closer to what the products cost to make and ship, and closer to what people could actually afford, there would not be a need for a huge credit industry.

      I remember, feel old saying that LOL, when a person with a credit card was a rarity.

      Comment


      • #4
        I'm 28, soon to be 29 and have never owned a credit card.
        Most say that's a bad thing.
        I'll keep my guns, freedom, and money... YOU CAN KEEP THE "CHANGE"!

        Comment


        • #5
          Originally posted by Domdabears View Post
          I'm 28, soon to be 29 and have never owned a credit card.
          Most say that's a bad thing.
          A bad thing for you? Not entirely. A debt free life has a charm all its own.

          It won't help when it comes time to get a home loan or car loan though.

          Comment


          • #6
            Originally posted by Kayso View Post
            A bad thing for you? Not entirely. A debt free life has a charm all its own.

            It won't help when it comes time to get a home loan or car loan though.
            yeah I know. I'm good on the car. My grandpa past away and left me his car. has 20,000 miles on it. should last a long time.
            Also my sons mom (my girlfriend) owns her house, and this is where I live. So far I haven't needed a credit card yet.
            I'll keep my guns, freedom, and money... YOU CAN KEEP THE "CHANGE"!

            Comment


            • #7
              You might want to apply for a gas card or department store charge card first. Use one a few times a year and pay it off that month you get a statement. I would suggest you avoid secured credit cards where you put up the money for your credit line. Once you have any card try not to cancel it just keep a zero balance and suggest you avoid any card with a yearly fee. Having one or more cards isn't a bad thing. One last suggestion is to get a debit or check card if you choose to have plastic and don't want a credit or charge card.

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              • #8
                The dollar is fine....the resession is over....the market is climbing....there is no inflation.....

                Haven't you guys been watching the news?......DOOM MONGERS!!!!!


                :)
                Live like you'll die tomorrow, learn like you'll live forever.

                Comment


                • #9
                  and if the Pricing and COLA in the country were actually realistic, we wouldnt need credit but for rare instances. any one else remember when medical care was actually affordable before it was turned into for profit companies.

                  Comment


                  • #10
                    Originally posted by Domdabears View Post
                    yeah I know. I'm good on the car. My grandpa past away and left me his car. has 20,000 miles on it. should last a long time.
                    Also my sons mom (my girlfriend) owns her house, and this is where I live. So far I haven't needed a credit card yet.
                    Domdabears, are you a vet? Fifth Third has an excellent vets acct that charges no fees(so far) free checks and accts, never pay a fee at any ATM, low interest credit card with zero fees, I pay it off every month so have yet to pay interest. So far they have hooked me and my family up.
                    He who lives with the most toys, wins.

                    Comment


                    • #11
                      We needed the U.N. to tell us that??!!
                      "If Howdy Doody runs against him, I'm voting for the puppet." - SkyOwl's Wife, 2012

                      Comment


                      • #12
                        Originally posted by Skyowl's Wife View Post
                        We needed the U.N. to tell us that??!!
                        point taken....:(
                        Live like you'll die tomorrow, learn like you'll live forever.

                        Comment


                        • #13
                          come on, lets be nice. at least stating the obvious makes them feel a bit smarter.:D

                          Comment


                          • #14
                            Originally posted by TennOutdoors View Post
                            come on, lets be nice. at least stating the obvious makes them feel a bit smarter.:D
                            Oddly....this makes sense....
                            Live like you'll die tomorrow, learn like you'll live forever.

                            Comment


                            • #15
                              Originally posted by Skyowl's Wife View Post
                              We needed the U.N. to tell us that??!!
                              I like you! Thank God for the UN right...Maybe Europe and some of these other countries should help us out for protecting their as*** for so many years!

                              Comment

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