Building a world of
resilient communities.

MAIN LIST

 

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.


Permaculture: the design arm of a paradigm shift

Permaculture is what we use to put into action our growing understanding …

Resilience Roundup - Apr 17

A roundup of news, views and ideas from the main stream press and the …

Looking for Some Answers

Jason Heppenstall looks for some ways to deal with the psychological aspects …

The Retro Future

Is it just me, or has the United States taken yet another great leap forward …

The Store(e)-Keeper

Teacher Heinz Frey halted the demise of “mom-and-pop stores” by …

"Art is about magic, and it's about change".

Art to me is about changing the way that I, or other people, experience or …

John Michael Greer: The God Of Technological Progress May Well Be Dead

The stories running our heads influence everything from our beliefs to our …