Wednesday, September 7, 2011

U.S. dollar could 'collapse': UN - (really?)

Some time ago, I wondered if the US Dollar would collapse, sending the world into chaos. Subsequently, I came to the opinion that is unlikely for two reasons:

  1. Mystery Babylon", which I believe to be the USA, is still the main player, flying the flag internationally, seemingly controlling the oceans, and being the centre of trade, when Lord YHWH judges her.
  2. There has been much talk of a one world currency, with plans to implement it. Obama has been negotiating with Russia for a couple of years now, and he is very likely a front man for the NWO (judging by the 'quantitative easing packages' and other signs), who will likely want to transition to a world dollar in the most optimal manner to preserve their assets. This means the central banking system that spans from the USA, which is not owned by the USA Federal Government, but by the NWO, will probably transition to become a major part of the One World Integrated Financial System.
So, having said that, here's a recent article worth comment:

U.S. dollar could 'collapse': UN
BY PATRICK WORSNIP, REUTERS MAY 25, 2011 COMMENTS (13)

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.

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.

Photograph by: 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