Building a world of
resilient communities.



UN body warns of US$ crisis

Currency likely to be devalued because of deficit

GENEVA — The US dollar is likely to be devalued to deal with the booming trade deficit in the United States, raising the prospect of global financial instability, the UN Conference on Trade and Development said yesterday.

Unctad said in its 2004 Trade and Development Report that the weakening of the dollar by up to 20 per cent against major currencies had failed to provide "much of a stimulus" to the US economy. The deficit was forecast to grow further this year, while the impact of expansionary monetary policy in the US will be limited by the inflationary impact of rising oil prices, it said.

"The large trade deficit of the United States is likely at some point to be tackled through exchange rate movements, through a devaluation of the dollar," said Mr Carlos Fortin, Unctad's Deputy Secretary-General.

That would "produce immediately exchange rate instability and generally financial instability", he told journalists, warning of a further knock-on impact on global trade with a potential rise in protectionism.

Mr Fortin predicted that a devaluation would prompt Asian countries to withdraw their capital from the US and to buy assets in other denominations, notably the euro. "There is very serious cause for concern about the sustainability of the situation," he added. — AFP

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.


This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.

Campaign melodrama: As the world burns

In the melodrama that passes for the U.S. presidential campaign, Donald …

Born of Triumph and Tragedy, Social Justice Org Fosters Health Equity and Well-being of Communities of Color

Though D’Artagnan Scorza grew up economically disadvantaged amidst a …

Help by Giving Time

Time is money – so the saying goes. Now you can donate and even …

Repair Cafe and Seeing the Beauty in Broken Things

Actually, in Silicon Valley, some engineers do still work with their hands, …

Dark Mountain Issue 10: Uncivilised Poetics

There’s something dishevelled and unsettling about poetry.

Vindication for Press Freedom as Charges Dropped Against Journalist Amy Goodman

In a vindication for press freedom and land protectors fighting against the …

Into the Ruins Issue 2: Review

Science fiction fans who pine for stories grounded in reality, rather than …