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.

Zarzalejo Futuro: future scenarios

What does it look like when Transition meets the 15M movement in the context …

Becoming Pattern Literate

The word “pattern” takes us over a vast territory.

Resilience Reflections with John Thackara

It’s taken me a long time to learn respect for the ways millions of …

A Review of Books 2 and 3 in the After Oil Science Fiction Anthology Series

This year saw the publication of not one, but two, more worthy additions to …

Sending Them a Message

If we want to “send a message to those who hate us,” here’s a new one: Come …

What If We Built Our Bridges through Placemaking?

Bridges are, by design, meant to bring people together. All we have to do is …

Paris: How Can we Start Unpicking the Spiral of Humiliation and Violence?

So long as our default setting is determined by humiliation and depends on …